Spectrum costs threaten performance of mobile networks

The GSMA has found that operators are struggling with spectrum costs, holding back investment to improve the performance of mobile networks.

According to the GSMA, on average, consumers are actually paying about 38% less for mobile services than a decade ago. That’s great news for our wallets. However, for the companies that provide our mobile services, it’s a different story.

Operators have seen a 96% crash in what they earn per gigabyte of data between 2014 and 2024. Imagine your income plummeting like that while your main business costs stay high, or even go up.

This massive drop in earnings, when you stack it against the often high cost of buying the rights to use spectrum, makes it incredibly tough for operators to spend money on expanding and upgrading networks. 

The report clearly spells out that when spectrum costs are high, it doesn’t just mean less cash for investment for operators; it can directly lead to patchier signals and slower download speeds. This isn’t just frustrating when you’re trying to watch a video; it puts the brakes on how our digital world can grow.

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.”

If the cost of spectrum (as a slice of an operator’s ongoing revenue) goes up by 10 percentage points, 4G and 5G coverage can shrink by as much as 6 percentage points, and our average download speeds can drop by up to 8%. This really shows how getting spectrum pricing right is vital if we want everyone to have good, affordable access.

“Governments and regulators must prioritise 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,” adds Badrinath.

The GSMA study also highlights that making more spectrum available really helps. Giving operators even just 10% more spectrum can mean better signal for up to 2% more people and can give download speeds a healthy 4% boost. This all points to the need for those in charge of spectrum to think about the bigger picture and its value to society, making sure it’s gettable at sensible prices.

How policy decisions inflate spectrum costs

The GSMA’s Global Spectrum Pricing Report drills down into how government and regulator decisions often push spectrum prices through the roof. They point out that choices like “setting artificially high reserve prices, creating artificial scarcity, and attaching onerous licence obligations” have frequently led to inflated spectrum costs.

The knock-on effects are huge: in some countries, paying for spectrum can eat up as much as 25% of what a mobile operator earns. That’s a lot of cash that could be going into making our networks better.

The study found that companies ended up paying 50% more if they were trying to buy spectrum in a market where it was deliberately kept scarce. And those high starting prices set by regulators? They don’t just risk making the final price higher; sometimes it means that spectrum doesn’t get sold at all.

In 37% of the spectrum sales the GSMA looked at, the final costs was simply the high starting price, not what companies might have bid in a truly competitive situation. It’s pretty clear that regulators need to set these starting prices low to let proper competition work out a fair price and stop vital spectrum going to waste.

A chance to improve the performance of mobile networks

There’s a big chance coming up to fix things. Between 2025 and 2030, almost 1,000 separate spectrum licences across 110 countries around the globe are due to run out. The GSMA is really pushing policymakers to see this as a “critical opportunity to reset pricing policies to drive investment in the next generation of mobile networks.”

It’s vital, the GSMA argues, that governments and regulators take a fresh look at spectrum prices. They need to make sure they line up with what’s actually happening in the market and the tough financial spot operators are in right now. The study even suggests some clear ways to price new spectrum and renew old licences—stressing that regulators need to properly think about the extra costs operators face if they have to meet specific investment targets or other conditions tied to the licence.

As our hunger for mobile data keeps on growing, it’s more important than ever for the people managing spectrum and making policy to think hard about its value to all of society. Making sure it’s available at prices that make sense impacts all of us.

See also: Vodafone, A1, Ericsson demo first 5G SA international roaming link

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Tags: 5G, connectivity, data, gsma, mobile, Networks, performance, regulation, report, spectrum, study, telecoms