Africa: High spectrum costs threaten telecom investment and connectivity growth across Africa

Africa’s mobile networks have expanded considerably over the past decade, extending coverage to a growing share of the population. However, improved network availability has not translated into widespread mobile internet adoption or service quality comparable with other regions.

A new report by the GSMA, Spectrum Policy in Africa: Enabling Investment and Empowering Consumers Through Effective Spectrum Pricing, identifies the high cost of accessing radio spectrum as a major constraint on telecommunications investment. African mobile operators pay more for each unit of spectrum while holding less of it than their global peers, limiting their capacity to expand networks and improve service quality.

According to GSMA Intelligence, spectrum costs account for 0.82% of mobile operators’ revenue per 100 MHz in Africa, compared with 0.66% elsewhere. African operators also hold an average of approximately 570 MHz of spectrum below 7 GHz, 24% less than the global peer average of around 750 MHz.

Licence duration presents another challenge. Only nine African countries routinely grant spectrum licences lasting 20 years or longer, whereas licences of at least 20 years, including indefinite-duration arrangements, are standard across Europe, North America and developed Asian markets.

Reducing spectrum fees could free up capital for network investment, but lower costs alone will not close Africa’s connectivity gap. The central challenge for regulators is to ensure that more affordable spectrum translates into measurable improvements in coverage, network quality and internet adoption, particularly in underserved communities.

Africa’s connectivity gap extends beyond network coverage

The difference between mobile broadband availability and actual internet use illustrates the scale of the challenge. According to the GSMA report, mobile broadband coverage in Africa increased from 59% of the population in 2015 to 92% in 2025. Over the same period, 4G coverage rose from 7% to 83%, while 5G reached 15% of the population by the end of 2025.

Despite these gains, only 28% of Africa’s population used mobile internet on their own devices in 2025, compared with 66% in the rest of the world.

The report estimates that 64% of Africa’s population lived within reach of mobile broadband but did not use mobile internet, while another 8% remained outside mobile broadband coverage altogether.

These figures reveal two connected challenges: extending networks to people who remain unserved and making internet access affordable and useful for those who already have coverage. Spectrum pricing influences operators’ ability to expand capacity and reach new communities, but adoption also depends on smartphone affordability, data prices and digital skills.

Network availability does not automatically guarantee meaningful access. People may live within a coverage area but lack the money to purchase a suitable device or data. Unreliable electricity can also limit the practical value of connectivity.

Service quality remains another concern. Average mobile download speeds in Africa reached just over 27 Mbps in 2025, compared with 98 Mbps in the rest of the world. Average monthly mobile data consumption stood at approximately 3 GB per connection in Africa, against 14 GB elsewhere.

The disparity highlights the need to address both network capacity and the economic barriers that prevent people from making greater use of digital services.

Why spectrum pricing matters for telecom investment

Radio spectrum provides the frequencies mobile operators need to carry calls, messages and growing volumes of internet traffic. Access to sufficient spectrum is therefore important for network capacity, service quality and the deployment of newer mobile technologies.

Yet the GSMA estimates that African operators had an average of 570 MHz of mobile spectrum below 7 GHz assigned to them at the end of 2025, compared with approximately 750 MHz in the rest of the world.

Despite holding less spectrum, operators in Africa face a higher cost burden. After accounting for the amount of spectrum assigned and comparing the costs with operator revenues, the report estimates that the burden is about 24% higher in Africa than in other regions.

This pressure comes as operators face declining revenue per customer. Average revenue per user across Africa fell by approximately 49% in real terms between 2015 and 2025, according to the report. Revenue earned per gigabyte also declined sharply as mobile data services became more affordable.

Telecom operators must therefore accommodate growing demand and serve more users while generating less revenue per connection. High spectrum fees can reduce the capital available for network upgrades and expansion, while discouraging operators from acquiring additional frequencies needed to ease capacity constraints.

The challenge is likely to intensify as mobile data traffic across Africa is forecast to grow by around 160% between 2025 and 2030. Without adequate spectrum and continued investment, rising demand could increase congestion and weaken network performance.

Egypt and Tanzania demonstrate different spectrum pricing approaches

The GSMA report compares Egypt and Tanzania to illustrate how spectrum pricing and licensing arrangements can shape the investment environment.

In Egypt, spectrum costs have increased sharply amid currency depreciation and inflation. Some spectrum and licence fees were denominated in US dollars, while operators earned revenue in Egyptian pounds. Currency movements consequently increased the effective cost of these obligations.

Operators also paid a combined $600 million for 5G licences without receiving additional spectrum in return.

Over the past decade, Egypt’s spectrum costs rose more than fivefold in nominal terms and by more than 50% in real terms. Over the same period, operator revenues declined by 16% and investment fell by 40%, according to the report.

These figures do not establish that spectrum prices alone caused the investment decline. However, they illustrate how rising regulatory costs, currency pressures and weakening revenues can combine to constrain telecom spending.

Tanzania presents a different approach. In July 2025, its regulator auctioned 200 MHz of spectrum in the 3.6–3.8 GHz band, which is widely used for 5G services. Reserve prices were set at a 30% discount to estimated market prices, while operators were permitted to spread payments over time.

Coverage obligations were also structured around achievable rollout targets.

According to the GSMA, Tanzania increased the spectrum available to operators without significantly increasing the cost burden per unit of spectrum. The example illustrates the importance of considering pricing, payment arrangements, licence duration and coverage requirements together rather than treating the upfront spectrum fee as the only relevant cost.

Coverage obligations can add to operators’ financial burden

Spectrum pricing is only one component of the cost of expanding mobile networks. Even when fees are reduced, operators may remain reluctant to invest in areas where populations are dispersed, household incomes are low, electricity is unreliable or backhaul infrastructure is expensive.

Regulatory obligations can add substantially to the overall cost of holding a spectrum licence. In Benin, the GSMA estimates that coverage and service-quality obligations add costs equivalent to 66% of annual operator revenue, compared with direct spectrum costs equivalent to 7%.

The report also identifies substantial additional burdens from licence obligations in Rwanda and Uganda.

Such requirements can support public policy goals by extending connectivity to underserved communities. However, obligations that are too expensive or poorly designed can undermine the investment needed to meet them.

Regulators therefore face the challenge of aligning coverage and service-quality requirements with local economic and infrastructure conditions. Where operators are required to serve commercially unattractive areas, carefully designed incentives or discounts may help reconcile public access objectives with investment viability.

The GSMA recommends setting spectrum prices according to the value operators can realistically generate rather than relying on outdated auction benchmarks.

The cost of serving remote communities extends beyond installing mobile towers. Where electricity and transport infrastructure are limited, operators may need to invest in power systems, transport fuel over difficult roads and build backhaul links connecting base stations to the wider network. Equipment theft can add replacement expenses, while poor physical access raises routine maintenance costs.

GSMA Intelligence estimates that remote rural base stations cost, on average, 35–40% more to operate than urban sites. These recurring expenses help explain why lower spectrum fees alone may not make rural coverage commercially viable.

Longer licences and predictable rules could support investment

Beyond pricing, the GSMA calls for longer spectrum licence terms, predictable renewal arrangements, technology-neutral licensing and clear roadmaps indicating when additional spectrum will become available.

These measures could give telecom operators greater certainty when planning and financing long-term network investments. More predictable licensing conditions may also help operators assess the commercial viability of network upgrades and future technology deployments.

The report estimates that spectrum policy reforms could bring an additional 50 million people within 4G coverage and 170 million within 5G coverage by 2035. It also projects average download speeds could increase by 30–50%.

The GSMA further estimates that the reforms could generate more than $120 billion in additional cumulative economic output across Africa between 2026 and 2035.

These figures represent projected benefits rather than guaranteed outcomes. Realising them would depend on how governments implement reforms, how operators respond through investment and whether consumers can afford to adopt the services made available.

Telecom policy must deliver measurable benefits for consumers

Reducing spectrum fees should not be an end in itself. The wider objective is to improve the capacity of telecom operators to invest in stronger networks, extend coverage to underserved areas and deliver better-quality, affordable services.

Achieving that outcome requires regulators to track what happens after pricing changes. Relevant measures include the amount of spectrum assigned, operator capital expenditure, the location of new infrastructure, connection speeds and improvements in coverage.

It is equally important to distinguish between network availability and actual internet adoption. Device affordability, data costs, digital skills and other barriers can prevent people from benefiting even when mobile broadband coverage is available.

For consumers, the ultimate measure of successful spectrum policy is not simply lower costs for telecom operators. It is more reliable connectivity, faster downloads, fewer dropped connections and improved access to online services for households and businesses.

Spectrum reform alone cannot eliminate Africa’s digital divide. However, pricing spectrum in ways that preserve investment capacity, while matching public obligations to achievable outcomes, could help address the continent’s connectivity challenges.

Whether these changes translate into better internet access will ultimately depend on how regulators and operators use the opportunity to expand networks, improve service quality and make connectivity more accessible.