GSMA report claims spectrum policies in Latam are impacting mobile quality
The GSMA has claimed spectrum policies in Latin America are having an impact on the quality of mobile services in the region.
In its report “Effective Spectrum Pricing in Latin America: “Policies to support better quality and more affordable mobile services”, the GSMA looked at pricing of spectrum across 15 countries in Latin America. It found pricing decisions by regulators can have a negative impact on mobile deployments and quality of service.
Average spectrum prices are around 60% higher in Latin America than they are in Europe, according to the GSMA, while the amount of spectrum allocated to mobile operators in the region is much lower than in Asia, Europe or North America.
The GSMA put the higher prices down to two key factors: 2.6 GHz spectrum, which has generally fetched lower prices than PCS and AWS because of its higher frequency, has not yet been allocated widely across Latin America; and many of the awards included in our sample are beauty contests or direct awards of PCS and AWS spectrum where regulators effectively set the price for spectrum upfront.
Future availability of frequencies forces mobile operators to accept these higher prices to ensure long-term competitiveness in their respective markets, the GSMA said in its report.
In a wider report, the GSMA looked at 325 awards of spectrum bands across 60 countries from 2000-2016, finding the final price of spectrum sold increased 3.5 fold during the 4G era (2008-2016). Average reserve prices increased over five-fold.
The report makes a link between the total spend on spectrum and the price of data, arguing that adoption of new services can be driven by lowering the cost of spectrum. Other issues it identifies around spectrum include high reserve prices, annual licence fees, short licence terms, inappropriate coverage obligations and uncertainty about renewals and new awards.
“Latin American countries that do not make spectrum available for 4G and 5G networks and artificially inflate the price are holding back their digital economies, not closing the digital divide and hurting consumers,” said Sebastian Cabello, head of Latin America, GSMA.
“Operators require fair access to sufficient radio spectrum in order to deliver high-quality and affordable mobile broadband services. Governments and regulators must adopt policies that support this in order to help their local digital economies to grow.”
Cabello went on to challenge policymakers to develop spectrum prices and roadmaps that will encourage operators to invest in next generation networks, ultimately giving consumers affordable access to mobile services.
He added: “Consumer demand for mobile data services continues to grow, but unless governments and regulators manage spectrum efficiently and make the process more transparent, affordable and achievable for operators, costs will not decrease sufficiently and consumers will not see the benefits.”
Capacity editor Jason McGee-Abe will be attending the upcoming Capacity Latam event, which will be in Rio from March 20. To arrange a meeting or share any news ahead of the event, email him on firstname.lastname@example.org