Friday, February 23, 2024

Telecom companies’ high costs are a major hurdle to 5G expansion in Pakistan

Three out of four Mobile Network Operators (Telecom) in Pakistan spend more than 10% of their annual sales on the spectrum, this slows down their progress toward 5G.

Publications from the Ministry of IT and Telecom Pakistan told the public about 5G. Coleago Consulting, an international consulting firm, just finished a study about the Pakistan spectrum. Which is now does look at by the government in charge.

The high cost of the spectrum could make it hard for operators to invest and offer affordable services. This could slow the rollout of MBB networks and make MBB services more expensive and of lower quality. In the long run, it will slow down digital progress in society and the economy.

In the documents, the operators asked the government to do something to lower the cost of the spectrum. Many countries around the world it has in place practices like annual payment, payment, etc. Make it easier for operators to get the money they need, especially in the early stages of setting up a network.

More network coverage, more service options, and higher adoption rates. Stronger competition is all sign of how competitive a country is in the global market. This is because low spectrum auction prices and long spectrum licensing terms make a country more competitive. The GSMA did an economic analysis and found that high spectrum prices increase costs because they limit the kinds of network investments that can do make.

High spectrum costs became also said to slow the rollout of 3G and 4G networks in less rich societies and cause permanent drops in the quality of the networks. The price of spectrum is going down everywhere in the world. Coleago Consulting came up with the Spectrum Price Index (SPI). That’s how much money you make from your cell phone each time means how much the spectrum itself costs.

SPI is 6 for 3G, 4 for 4G, and 2 for 5G. These amounts are equal to 3 percent, 2 percent, and 1 percent of annual revenue for 3G, 4G, and 5G spectrum costs, respectively. Countries with rates lower than 1% include China, the United Arab Emirates, Saudi Arabia, and Kuwait.

Colego’s research also found the following about how the annualized cost of the spectrum affects MBB investments:

The cost of a spectrum of up to 5 percent is probably not going to slow down investments in mobile broadband and 5G. Also, there are signs that 5G is less successful when it is put into place.
In several mature 4G regions, the annualized cost of spectrum is thought to remain between 5% and 9% of mobile revenue. This suggests that a percentage of the annual below 10% might not affect network deployment very much.

When the price of spectrum is more than 10% of a mobile operator’s income. They are likely to slow down their investments in mobile broadband and 5G because of money issues. Spectrum costs that are more than 10% of revenue can slow down the progress of 5G.

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