GSMA sees dangers in single wholesale networks

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COMPETITION Competing mobile networks drive greater innovation and investment
The global umbrella body of Global System for Mobile Communications operators, GSM Association, has warned against the dangers posed by policies in some countries trying to promote single wholesale networks in their telecoms sectors. In a new report released by GSMA, the global body predicted that a move away from traditional mobile network competition towards single wholesale networks would stifle innovation, restrict investment and take-up of mobile broadband services and ultimately be against consumer interests.

Developed by Frontier Economics, the report, “Assessing the Case for Single Wholesale Networks in Mobile Communications,” examines whether single wholesale networks could meet a government’s objective for improved coverage and explore more effective ways to achieve the same goal.
The report analyses the historic performance of countries with a single network compared to those with multiple competitors to consider how a single wholesale network would likely perform in practice. It finds that in countries with competing networks, 3G covered 36 per cent more population and that overall coverage increased three times faster than in those served by a single network.
“In 2000, there were as many countries served by a single mobile network as there were those with competing networks. Today, only 30 countries, representing less than three per cent of the world’s population, are served by a single network,” Chief Regulatory Officer, GSMA, Tom Phillips, said.
According to Phillips, “Network competition has produced unprecedented growth and innovation in mobile services, with 3.7 billion unique mobile subscribers globally in 2014, more than $1.7 trillion of total worldwide investment since 2002 and mobile 3G broadband coverage reaching over half of the world’s citizens. This indisputable success story should continue in the era of mobile broadband, across the globe and particularly in emerging markets.”
New Telegraph learnt that in Nigeria, the days of the Nigeria Telecommunication Limited (NITEL) as the single national operator in the country, signposted the era of single wholesale network, where monopoly was the order of the day. However, following the liberalisation of the nation’s telecoms’s market in 2001, healthy competition has set in among players, resulting in continuous reductions in tariff for telecoms services while investment inflows have increased from $500 million to over $32 billion between 2001 and April, 2014.
Advocates of single wholesale networks argue they can respond to issues such as inadequate or slow coverage in rural areas, inefficient use of spectrum and a lack of incentives for the private sector to maximise coverage or investment better than the model of network competition. However, the GSMA report demonstrates that the existing approach of network competition offers better long-term benefits in terms of network coverage, innovation and new services, uncertainty for investors, impact of monopolies as well as subsidising network competition.