A GSMA report into the price of spectrum for mobile services revealed a sharp rise in its cost relative to the revenue generated from it over a ten-year period, a factor cited as constraining infrastructure spending.
Its Global Spectrum Pricing Report showed while the average cost of spectrum had fallen since 2014, a need for operators to increase their holdings to cope with demand and a 60 per cent drop in revenue generated per MHz had ramped the cost burden.
In 2023 global cumulative spectrum fees accounted for 7 per cent of total operator revenue, a 63 per cent increase on 2014 figures.
The GSMA argued the proportionately high cost of acquiring spectrum restricts “operators’ ability to invest in expanding and improving mobile networks, particularly 4G and 5G,” asserting “higher spectrum costs correlate directly with lower network coverage and reduced mobile speeds”.
Commenting on the report, GSMA director general Vivek Badrinath added: “A dollar can only be spent once, and high spectrum costs can choke investment at a time when the need for affordable, reliable connectivity has never been greater”.
“Governments and regulators must prioritise spectrum pricing that reflects market realities and fosters long-term digital growth. By ensuring spectrum is affordable, they can unlock faster network expansion, better service quality, and greater digital inclusion for all of their citizens.”
Among the factors cited as continuing to inflate spectrum costs were artificially high reserve prices, creation of artificial scarcity and “onerous” licence obligations.