High spectrum costs always have been a barrier to market entry in the mobile industry. Indeed, some would argue that mobile business models are built on spectrum scarcity.
The corollary is that releasing more spectrum, at lower prices, spurs competition and innovation.
A study by NERA Economic Consulting, sponsored by the GSMA, argues that high spectrum prices have lead to lower-quality networks, reduced take-up of mobile data services, reduced incentives for investment, higher consumer prices and lost consumer welfare with a purchasing power of US$250 billion across a group of countries where spectrum was priced above the global median.
“Where governments adopt policies that extract excessive financial value from the mobile sector in the form of high fees for spectrum, a significant share of this burden is passed onto customers through higher prices for mobile and lower quality data services,” NERA says.
“In summary, the current outlook is for reduced spectrum scarcity but uncertain scope for operators to generate revenues from mobile networks,” NERA notes. “This implies that prices paid for spectrum should fall, especially as future releases are increasingly focused on higher frequency bands.”
“Countries that try to resist this trend, either by restricting spectrum availability or overpricing newly released spectrum, are likely to see large amounts of spectrum go unallocated,” NERA warns.
source: GSMA
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