Thursday, March 30, 2023

ICT Whitepaper recommends reducing spectrum prices

The Pakistan National ICT Industry Development Plan says that the prices of spectrum must go down. The study said that the cost of spectrum for businesses must go down. The document says that spectrum costs are very high for businesses in Pakistan. ICT recommends lower auction prices and longer spectrum lengths lead to more network coverage, a wider range of services, more users, and more competition.

This information is available in the whitepaper after LahoreHerald looked into it.

The study says that customers lose out when high spectrum costs keep networks from growing. Many organizations are developing annual payment and deferred payment plans to make it easier for operators to pay. Especially in the early stages of network deployment.

In general, network coverage, service availability, adoption, and competition all improve when spectrum auction prices stay low and licenses last longer. The GSMA says that when spectrum prices are high, network investment goes down. This is bad for consumers.

The whitepaper says that spectrum costs are going down around the world. Coleago Consulting Ltd. made the Spectrum Price Index (SPI), which is calculated as the total cost of spectrum divided by the monthly income from mobile phones. 3G costs $6, 4G costs $4, and 5G costs $2. This means that the 3G spectrum costs 3% of sales, 4G costs 2%, and 5G costs 1%. The only countries with less than 1% are China, the United Arab Emirates, Saudi Arabia, and Kuwait.

Read more: Pakistan made 14 million phones in Jan-Jul 2022

When spectrum costs 10 percent of mobile income, the Coleago analysis shows that operators have budget problems and spend less on mobile broadband and 5G. Spectrum expenses can potentially hinder development toward 5G if they surpass 10% of sales.

In Pakistan, there are three MNOs that place more than 10% of their income into the spectrum. Due to the high cost of spectrum, operators are not able to invest and offer affordable services, which could slow the growth of MBB networks, raise prices, and lower the quality of MBB services.

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