Effective Spectrum Pricing: Supporting Better Quality and More Affordable Mobile Services

Wed Feb 22 16:09:37 EST 2017
By Richard Marsden, Dr. Bruno Soria, and Hans-Martin Ihle

In a recent report written for the GSMA, NERA Managing Director Richard Marsden, Associate Director Dr. Bruno Soria, and Senior Consultant Hans-Martin Ihle examine the proposition that careful spectrum management is central to the digital economy. The report highlights the damage done to consumers by policies that artificially inflate spectrum prices; investigates spectrum pricing trends worldwide and their impact on consumers; and includes best practices for policymakers.

The report makes four key recommendations: (1) set modest reserve prices and annual fees, and rely on the market to set prices; (2) license spectrum as soon as it is needed, so as to avoid artificial spectrum scarcity; (3) avoid measures that increase risks for operators; and (4) publish long-term spectrum award plans that prioritize welfare benefits over state revenues.

With 5G and advanced 4G technologies requiring ever-increasing amounts of spectrum, those countries that inflate prices are not only damaging their broadband future, they are holding back their entire digital economies. The mobile industry, directly and as an enabler of adjacent sectors and services, contributed US$3.1 trillion to global GDP (i.e., 4.2%) in 2015. Governments and regulators must fully appreciate their ability to maximize—or thwart—their digital futures when making policies that determine spectrum prices.