GSMA (Global System for Mobile Communications), the global telco body, has called on governments to lower spectrum prices. In its new GSMA Global Spectrum Pricing Report, the organization pledged to help support global digital growth.
The report mentions that the spectrum pricing across the globe still remains a detrimental factor behind slow growth for digital connectivity. The problem, according to the report, is that the exorbitant pricing on radio waves has derailed operators from expanding and improving their network and bring in newer and innovative technologies.
Essentially, the report shows that the operators are earning less from their major revenue source – data. The report mentions that the average revenue per GB has fallen by 96% between 2016 and 2024. But the stubborn stability of the frequency fee is a plight.
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Global spectrum costs represent 7% of telcos’ revenues. It’s a 63% increase in the last decade. But the average revenue coming from per megahertz (MHz) of spectrum has decreased by 60% during the same period. Operators now have increased spectrum holdings by up to 80% to withstand bandwidth demand.
The report highlights that a GB of data is much cheaper today than it was ten years ago. As a result, telcos are facing a 96% decline in revenue per GB between 2014 to 2024. But the spectrum price is largely high, which has impacted operators’ ability to bring advanced services to their customers. To be specific, it has hurt the telcos that want to launch 5G or even 4G and expand them across the country.
Vivek Badrinath, Director General of the GSMA, said: “The mobile industry sits at the heart of the digital economy, enabling services and opportunities that transform lives. But 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 prioritize 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.”
The report also stresses some adverse practices, such as setting high reserve prices, creating artificial scarcity, etc., that have contributed to skyrocketing spectrum costs. Starkly enough, some of the telcos across the world pay 25% of their total revenues for spectrum.
GSMA tells policymakers to revise their stance on spectrum prices to sync with the current market conditions. The organization says that the current times give a vital opportunity to readjust spectrum prices to drive up potential for the industry for the next generation of cellular services.