Competition Between National Regulatory Authorities for Operator Investment
National Regulatory Authorities are in competition with each other to attract international investment and need to take a strategic and flexible approach to regulation in an era of rapid telecommunications change.
In a landscape of finite resources and competing markets, the allocation of spectrum has become a pivotal factor in telecommunications development. Moreover, the recent discourse at a spectrum management conference highlighted the critical competition among regulators vying for telecom operators’ investments. Consequently, the primary criterion for this investment is the amalgamation of high future returns and minimal risk.
A Strategic Framework
This paper explores the complexities of the statement, offering a strategic framework for National Regulatory Authorities to attract operator investments. It discusses the trade-offs regulators and governments encounter, focusing on balancing revenue from spectrum assignments with broader societal goals, such as rural coverage extension.
One of the pivotal challenges lies in reconciling the pursuit of revenue through spectrum assignment with the imperative to ensure operators invest in expansive coverage. Overextending coverage obligations beyond commercially viable levels can reduce operator expenditure on spectrum.
Adopting a Holistic Approach
To strike this balance, regulators and governments need a holistic approach maximising long-term socio-economic benefits. This requires a regulatory setup enabling operators to exceed their Cost of Capital. In a capital-constrained world, the regulatory framework should ensure returns per dollar invested outperform those in other jurisdictions.
Our Expertise
Coleago’s deep understanding of spectrum management best practice from an operator’s perspective provides invaluable support. Having worked closely with operators for years, Coleago recently aided Tanzania’s Communications Regulatory Authority (TCRA) in formulating and executing the 700 MHz band’s spectrum assignment process. Leveraging extensive expertise in understanding the impact of licence obligations on spectrum value, this involvement enabled TCRA to craft a process and obligations that balance assignment revenues, regulatory goals, and global operator appeal. Tanzania’s approach establishes it as an attractive investment destination while ensuring a well-balanced spectrum management strategy.
Conclusion
In conclusion, amid the evolving telecom landscape, strategic spectrum deployment remains crucial for regulators and governments. Coleago’s collaboration with TCRA highlights the nuanced approach needed to foster a symbiotic relationship between regulatory revenue, policy goals, and operator investments, paving the way forward.
Other insights
The Polish 700 and 800 MHz Spectrum Auction: Insights and Global Lessons
Poland’s final low-band spectrum auction marks a pivotal moment in Europe’s 5G rollout, offering key lessons in auction design, cross-border coordination, and strategic spectrum management.
The Case for Strategic Spectrum Renewal
As spectrum licences approach their expiry date, a strategic approach to spectrum renewal is crucial. Traditional presumption of renewal in favour of incumbents may no longer serve the industry’s needs. Instead, a more strategic approach to renewal can optimise spectrum assignments and improve spectral efficiency by up to 40%.
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.
Learning From Best Practice Spectrum Management in Botswana
The Botswana Communications Regulatory Authority conducted a review of its spectrum management strategy to align with international best practice. The Authority was advised by Coleago and in this paper, Project Director Graham Friend highlights the lessons to be learned for other regulators in developing markets.
The End of Telecoms History? – Not Quite!
At the European 5G conference, Stefan Zehle highlighted that differences in mobile data usage across countries result from variations in price and network availability. While European policymakers celebrate 89% 5G coverage, gaps in both outdoor and indoor connectivity limit usage. William Webb’s prediction that data traffic will plateau at 20 GB per user per month by 2027 seems unlikely, given that top users already exceed 100 GB. To fully realise 5G’s potential, policymakers must address these coverage issues in a cost-effective manner.
Insights from a Strategic Spectrum Review
The mobile industry has accumulated a fragmented spectrum portfolio, consisting of various frequency bands that are sub-optimally allocated for modern technologies like 4G and 5G. As operators transition from legacy technologies such as 2G and 3G to newer, bandwidth-intensive solutions, the need for contiguous spectrum blocks has become critical.
