Tanzania 700 MHz Spectrum Auction – Learning from Best Practice
The Tanzanian telecommunications regulator recently concluded a successful spectrum auction which reflected all the key elements of best practice spectrum management. Coleago advised TCRA and in this paper, we highlight the key factors that contributed to the success of the auction.
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The Tanzania Communications Regulatory Authority (TCRA) recently held a highly successful auction for the 700 MHz spectrum. It allocated the entire spectrum, raising over US$20 million and significantly improving market competition. Additionally, it imposed coverage obligations to boost rural broadband access. This stands in stark contrast to numerous other spectrum auctions in Africa, many of which faced partial or complete failures.
Graham Friend, advising TCRA throughout this process, emphasises the critical factors contributing to this triumph and offers valuable insights for other regulators to emulate. The Tanzanian approach focused on long-term policy objectives, shaping the spectrum assignment process to align with the country’s National Broadband Plan. Crucially, this approach prioritised expanding mobile broadband coverage, fostering competition, and stimulating investment and innovation in the sector. Notably, Tanzania recognised that while revenue generation and promoting investment might not align perfectly, the enduring economic benefits of widespread mobile broadband far exceed short-term auction proceeds. Furthermore, the process underscored fairness, transparency, and efficiency as guiding principles.
The success of the Tanzanian auction suggests several key factors for regulators elsewhere to consider:
Embrace long-term policy objectives over immediate gains.
Implement a robust process aligned with national goals.
Allocate sufficient time for comprehensive planning and execution.
Evaluate potential impacts on future competition.
Employ tailored modelling exercises to gauge spectrum value accurately.
Set appropriate reserve prices reflective of market realities.
Adopt a straightforward auction design to streamline proceedings.
Prioritise clarity to minimise confusion among stakeholders.
This success story signifies a significant leap for Tanzania’s socio-economic progress, emphasising the potential impact of a well-structured and goal-oriented spectrum assignment process. By prioritising long-term vision and strategic alignment, regulators worldwide can replicate this success, fostering growth and innovation in their respective telecommunications sectors while meeting societal needs.
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Best Practice Spectrum Management
The principles of best practice spectrum management are well established and their implementation can enhance the socio-economic value of spectrum and how much operators are prepared to pay to acquire new spectrum. Whilst most regulators in developed markets have adopted best practice, the same cannot be said for developing markets. Coleago recently studied the regulatory environments in 16 African markets and recorded the extent to which best practice had been adopted.