Spectrum roll-out needed urgently for 5G technology investments

Governments in sub-Saharan Africa have been slow to allocate spectrum, which hampers mobile technology investments. 

A global mobile industry body has urged governments in sub-Saharan African countries to ramp-up their efforts in allocating more spectrum that will enable more telecommunications companies to invest in 5G technology.

Groupe Spéciale Mobile Association (GSMA) said in a report released this week that the first priority for governments should be the allocation of sufficient spectrum for 5G, which is the latest mobile technology that promises fast internet speeds than earlier systems such as 2G, 3G, and 4G. GSMA represents mobile operators worldwide including handset and device makers, software companies, equipment suppliers and Internet companies. 

Telecommunication companies across sub-Saharan Africa have been urging governments to release more spectrum as it would unleash more investments in mobile technology that would improve the quality of downloads and video calls, and bring down the cost of data. 

The African continent is on the cusp of the fourth industrial revolution – underpinned by smart technology and how it changes the way humans work, live and interact with the world. High quality mobile technology and the digital economy is a key feature of this revolution. 

The release of spectrum is also expected to facilitate more investment and mergers and acquisitions among Africa’s largest telecommunications companies such as South Africa’s Vodacom and MTN, Egypt’s Orascom Telecom, Kenya’s Safaricom, and Morocco’s Maroc Telecom

In its report titled The Mobile Economy 2019, GSMA said sub-Saharan Africa was expected to lag the rest of the world, with 5G technology expected to account for 3 percent of the region's connections by 2025 compared with the world’s average of 15 percent (see below).

Source: The Mobile Economy 2019

North America and Europe are expected to be the frontrunners on the adoption of 5G technology, with the technology expected to account for 47 percent and 29 percent respectively for both regions’ connections by 2025. 

“A number of operators are already undertaking trials and evaluations, mainly those based in South Africa, which reflects the country’s status as one of the wealthiest and technologically advanced in the region,” said GSMA. 

In 2018, MTN and Ericsson partnered to launch the first 5G customer trial deployment in South Africa. MTN is also planning to test other 5G consumer use cases. Vodacom is also investigating 5G fibre-like services – but this hinges on the release of more spectrum. 

GSMA said mobile operators around the world were investing an estimated $160 billion a year on expanding and upgrading their networks to improve their technology offerings. Sub-Saharan Africa is largely a 2G and 3G region with both technologies making up 59 percent and 35 percent respectively in 2018, according to GSMA’s figures.  

The proliferation of 5G technology not only depends on the roll-out of spectrum by governments but also the penetration of smartphones among consumers in sub-Saharan Africa. GSMA expects that smartphone adoption rates in the region will increase from 36 percent in 2018 to 66 percent in 2025. The world average for smartphone adoption was 60 percent in 2018. 

Advice for governments 

The GSMA report noted that mobile technologies and services generated 7.1 percent ($110 billion) of GDP across sub-Saharan Africa in 2017. The extension of mobile technology connections to rural areas in the region required investment-friendly policies in order to facilitate multiyear capital expenditure programmes, it said. 

GSMA said authorities should be looking at two key areas for review and reform when it comes to the rollout of spectrum and 5G technology.

“Firstly, regulatory frameworks should be reviewed and updated to promote market dynamism, competition, and consumer welfare, while discarding legacy rules that are no longer relevant in the context of the digital ecosystem,” it said. “Secondly, governments should reduce the sector-specific tax burden to encourage investment in new technologies.”

By setting the right regulatory context, governments create incentives for technological innovation and investment that benefit all of society.