GSMA calls for countries to open up mobile network space
Monday September 04 2017
The 4G Square in Kigali. The low adoption of the 4G high speed network has forced Korean Telecom to look outside the borders of the country. PHOTO | CYRIL NDEGEYA
The Single Wholesale Network (SWN) model has failed to deliver on its promise of widely accessible, affordable, fast Internet says the Global Systems Mobile Association (GSMA) in its latest report.
The association is instead calling on regulators to dilute the monopolies enjoyed by these wholesale networks to open the market to competition.
According to GSMA, citizens stand to benefit more if the market is opened to mobile networks that have a better track record of delivering wider broadband coverage at affordable prices. Competition will also bring innovation along the data ecosystem.
“The model has failed to produce expected results and the market should be opened up to competition from other commercial network providers. This is the prudent thing to do and it’s never too late to adopt a different approach,” said Brett Tarnutzer, the head of spectrum at GSMA, in a phone interview with Rwanda Today.
He said governments need to look into adjusting these models to let other players, especially mobile network operators take part.
Rwanda signed a 25-year public-private partnership deal with Korea Telecom (KT) an LTE-based network in 2014, making KT the sole 4G wholesaler, but the regulator says it is premature to say if the model has failed.
“It is still too soon to tell,” said Major Patrick Nyirishema, the director-general of Rwanda Utilities Regulatory Agency (RURA).
“The wholesale models will stay because the economics will support them. When we started with it in 2014, we knew that it is a long-term model that doesn’t give quick results,” said Major Nyirishema.
READ: Korea Telecom to spread 4G brand beyond Rwanda border
According to the report, ever since Rwanda signed with KT, it is still struggling to achieve the coverage, price and competition goals.
“The current progress in terms of coverage suggests it is unlikely the original coverage target of 95 per cent will be achieved by the end of 2017 by Rwanda” reads the GSMA report.
Major Nyirishema said coverage is not an issue in Rwanda because 4G coverage has been growing for the past two and a half years and is currently head to head with 3G.
“The 4G prices have also been reducing, 1GB started at $5, but this has gone down to just above $1. Since 2014, the price has reduced by 30 per cent,” he added.
The report said that although there have been significant reductions in the wholesale price, they have not translated into lower retail prices on a consistent basis.
The 4G concession awarded to KT meant that the three national operators in the market could not be given spectrum to manage their own 4G networks.
KT has previously attributed the slow 4G adoption to errant retailers who inflated 4G prices for the final consumers.
Wholesale networks also tend to benefit from significant public subsidies and other forms of support, which are typically not available to competing network operators, putting other players at a disadvantage.
The report says that the push for this model has stalled in Kenya due to a complicated negotiation process with a number of stakeholders.
The initial plan suggested that an LTE consortium should cover 98 per cent of the population, which has not happened. Although no official announcement has been made, the plan seems to have since been abandoned.