Joy Agwunobi
The Global System for Mobile Communications Association (GSMA) has raised urgent concerns over the long-term sustainability of mobile infrastructure investments, warning that spiraling spectrum costs are threatening the rollout of next-generation networks such as 4G and 5G.
In its latest Global Spectrum Pricing Report, the GSMA reveals a 96 per cent decline in mobile network operators’ (MNOs) revenue per gigabyte over the past decade. This steep drop, the association warns, is undermining the financial viability of continued investment in advanced mobile networks that are critical for digital transformation worldwide.
A central issue identified in the report is the growing imbalance between declining operator revenues and the rising costs associated with acquiring spectrum which is the lifeblood of mobile communications. While spectrum prices per megahertz (MHz) have decreased in some bands, overall costs have soared due to a significant increase in total spectrum holdings, driven by escalating data demands.
“Although prices for spectrum per MHz have dropped by up to 75 per cent in some regions since 2014, operators have had to expand their spectrum holdings by 80 per cent to meet bandwidth demands,” the report notes, adding “This has led to an overall increase in spectrum-related expenditure, straining capital resources.”
According to the GSMA, global cumulative spectrum fees now represent approximately 7 per cent of operator revenues — a 63 per cent increase over the last decade. Meanwhile, average revenue generated per MHz of spectrum has declined by 60 per cent during the same period. In extreme cases, spectrum fees have reached as high as 25 per cent of an operator’s revenue, severely impacting profitability and operational efficiency.
The report further criticises policy frameworks in several countries that contribute to inflated spectrum pricing, including excessively high reserve prices in auctions, artificial spectrum scarcity, and burdensome licensing conditions. These factors, the GSMA argues, are creating a hostile investment climate for telecom operators and impairing their ability to enhance network quality and coverage.
“The combination of high spectrum prices and rigid regulatory conditions is compromising network performance,” the GSMA states, adding that this has led to slower mobile speeds and degraded connectivity in some regions, ultimately hampering broader digital economic development.
Nigeria’s 5G rollout exemplifies the challenges highlighted in the GSMA’s findings. In December 2021, during the country’s inaugural 5G spectrum auction, MTN Nigeria and Mafab Communications each paid $273.6 million for 100MHz slots in the 3.5GHz band. MTN further paid an additional $15.9 million to secure its preferred frequency position.
In January 2023, Airtel Nigeria later emerged as the sole bidder in the second auction round, paying $316.7 million in total, including license fees and deposits.
These high upfront costs, the GSMA warns, could limit the ability of operators to make additional infrastructure investments, potentially slowing the pace of 5G deployment and reducing access to affordable high-speed internet across the country.
With nearly 1,000 spectrum licences set to expire globally by 2030, the GSMA is urging governments and regulators to seize this moment to recalibrate their spectrum pricing strategies. The association argues that aligning spectrum fees with the economic realities faced by operators will encourage increased investment in network expansion, improve service quality, and promote broader digital inclusion.
Vivek Badrinath, director general of the GSMA, emphasised the broader implications of inaction stating, “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.”
Badrinath stressed that adopting market-aligned spectrum policies is essential to unlock faster network rollouts, enhance consumer experience, and foster sustainable digital growth across both emerging and developed markets.
As data consumption continues to soar and digital infrastructure becomes more critical than ever, the global telecom body calls on policymakers, governments to create an enabling environment that supports long-term investment, prioritises affordability, and secures the future of mobile connectivity, noting that failure to address the growing spectrum cost burden could risk stalling progress on global digital inclusion and connectivity goals.
