G20: the mobile industry speaks up

The mobile industry has not asked for a bail-out to stem the recession, and is reminding everyone about its financial strength. In their letter  to the G20 leaders, sent under the aegis of GSMA last Thursday, senior executives from 25 mobile operators pledged $550 billion investment in mobile broadband networks globally.

They claimed the investment could create 25 million jobs and help pull the world out of recession. The letter follows similar pronouncements at the Mobile World Congress in Barcelona in February 2009.

However, the bosses are asking for something in return. They want governments to commit to "allocate the radio spectrum needed over time to build these new networks, and delivery of a stable, predictable and minimally intrusive regulatory environment."

The GSMA said signatories to the letter include the CEOs of AT&T, Bharti, Deutsche Telekom, MTN, Orascom, Telefonica, Telecom Italia, Vodafone, Nokia and Ericsson.

At a time when the industry is debating how the economic downturn will affect the timescales for the roll-out of LTE, the $550 billion investment pledge is commendable. The industry was badly hurt by the excesses of the 3G licensing regime and should governments adopt a similar approach it is doubtful whether new network roll-outs will occur on a grand scale.

The call for more affordable spectrum is inextricably linked with the request for a stable regulatory regime: the industry has experienced a regulatory onslaught regarding roaming, termination rates and mobile number portability, but has always accepted its fate for the "greater good of society."

Now is the time for the GSMA to speak up to avoid the industry being trampled. We have seen extra tax on telecoms in France to pay for changes in broadcasting. In the Philippines, an SMS tax has been proposed. Such an SMS tax has also been mooted in Ireland and across the EU.

In the US, there are suggestions for the government to impose a retrospective tax on spectrum. If and when governments begin to seek new income to pay for their fiscal policies, it is pertinent for the mobile industry to remind them that they should not kill the goose that lays the golden egg.

The industry will achieve more by localising its call

At a time when debate is raging over the impact of a laissez-faire regulatory approach on the financial sector, it is understandable that governments will be wary of another industry calling for lighter regulation. Indeed, one of the main takeaways from the G20 was the reinstitution of greater regulation on the financial world.

As such, the mobile industry cannot expect governments (which have come up with their own $1.1 trillion stimulus package) to capitulate to its offer. Several mobile operators have already slashed their capex spending in the face of the recession, impacting new mobile network deployments.

The industry must  also localise its cause. After all, the G20 only represents 20 of the markets in which it operates. Those markets, especially in Europe, where governments have a national broadband agenda, the mobile industry will achieve more by reinforcing its position locally. For the CEOs to achieve their aim, both global and local pressure will be required.

Emeka Obiodu, Senior Analyst

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