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Intelligence Brief: How can more effective spectrum policies help connect Africa?

The international community has set several ambitious targets when it comes to internet connectivity. The Broadband Commission for Sustainable Development aims to reach 75 per cent broadband internet user penetration by 2025 (or 65 per cent in developing countries), while the World Bank’s Digital Economy for Africa initiative seeks to ensure that every individual, business and government in Africa will be digitally enabled by 2030.

While such targets are welcome, achieving them remains a significant challenge, particularly in Africa where almost 75 per cent of the population, or 950 million people, do not access internet services. By 2025, almost 60 per cent of the population are still expected to remain offline.

To close this digital gap, it will be necessary to address a number of barriers to adoption, as well as the coverage gap, those living outside of areas covered by mobile broadband networks. Of the 600 million people which do not have broadband coverage, half live in Africa and one of the key barriers to expanding coverage is spectrum policy. The scale of the challenge is highlighted in a new study by GSMA Intelligence, Effective Spectrum Pricing in Africa [1]. This report, which is unprecedented in scope and depth, tracks spectrum assignments across nearly 50 African countries during the 2010 to 2019 period. The key findings are:

Governments in Africa have assigned approximately half the amount of mobile spectrum compared with the global average. This gap in spectrum assignments has emerged and expanded over the last decade, making it difficult for many African operators to offer fast mobile broadband speeds. African governments have also, on average, licensed 3G and 4G spectrum around three years later than other regions.
Countries in western and northern Africa account for a large proportion of the highest spectrum prices globally. Adjusting spectrum prices by income, Africa accounts for about half of all the extremely high spectrum prices worldwide, with most of these concentrated in western and northern Africa. Spectrum prices in the continent are twice as high as the global average and four times higher than in the developed world. Niger, for example, has seen some of the highest spectrum prices in the region during the last decade and some of the lowest levels of mobile broadband coverage, network speeds and mobile adoption.
Licensing more spectrum earlier and at affordable prices can pay dividends for African consumers. Higher amounts of spectrum and lower prices are strongly linked to higher population coverage, download speeds and adoption. Countries which have assigned spectrum earlier have also achieved higher coverage levels. This is consistent with previous research [2] on the topic. For example, Kenya released mobile broadband spectrum earlier than most other countries in Africa and it has assigned one of the highest amounts of coverage spectrum per operator. Partly as a result, mobile broadband has now reached more than 95 per cent population coverage.

These findings have important policy implications. Operators can only invest in networks and deliver high-speed services to businesses and consumers if governments award enough spectrum at affordable prices, especially when the impacts of Covid-19 (coronavirus) are constraining growth in the private sector and the economy more widely. Furthermore, the longer-term economic benefits of doing so far outweigh any short-term public revenue gains. Connecting all of Africa to mobile internet by 2030 would add 5.5 per cent to projected economic growth over the next decade and it also help reduce poverty.

So what should governments do?
First, they should release more spectrum to expand coverage, improve network quality and encourage mobile adoption. This includes any spectrum left over for use in the 900MHz, 1800MHz and 2100MHz bands as well as spectrum to enable coverage (700MHz and 800MHz bands) and capacity requirements (2300MHz and 2600MHz bands). To realise the full potential of mobile services, authorities should licence spectrum in a timely manner, which enables faster and wider network deployments. Going forward, this will include the spectrum required for new 5G services.

It is also important spectrum policy supports affordable pricing, with well-designed auctions which have clear rules and guidelines. Such auctions should avoid creating artificial scarcity, allow price discovery and they should set modest reserve prices and annual fees. Otherwise, operators may have less ability to invest or, at worst, it will result in vital spectrum not being sold (as happened in Ghana and Mozambique).

Lastly, governments should provide long-term licences and give operators the flexibility to manage spectrum with technology–neutral licences, in order for them to optimise the use of each band. Many countries have now issued technology-neutral licences, some in response to Covid-19 (for example in Tunisia). Indeed, there have been a number of examples of regulators taking measures [3] to mitigate the impacts of the pandemic and enabling operators to maintain quality and resilience in existing networks, as well as rolling out new 5G networks [4]. Such measures, which could be made permanent, offer lessons on how regulators and policymakers in Africa can support operators to continue expanding networks in the coming years, especially given the continued economic uncertainty.

– Kalvin Bahia – economist, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.gsma.com/spectrum/resources/effective-spectrum-pricing-africa/
[2] https://www.gsma.com/spectrum/wp-content/uploads/2019/09/Impact-of-spectrum-prices-on-consumers.pdf
[3] https://www.gsma.com/newsroom/blog/keeping-everyone-and-everything-connected-how-temporary-access-to-spectrum-can-ease-congestion-during-the-covid-19-crisis/
[4] https://www.gsma.com/spectrum/new-zealand-leads-the-way-with-direct-approach-to-5g-spectrum-access/

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