Kenya should release mobile spectrum for economic benefits-report

By JAMES RATEMO

Kenya should release more spectrum for use by the mobile telephony industry for GDP growth.
The latest report by GSMA indicates that the stimulus to GDP by 2020 amounts to 1.79 per cent which is equivalent to over Sh80.6 billion.

The ongoing analogue to digital broadcasting shift would aid in the release of the much needed spectrum commonly referred to as digital dividend.

Shift to digital broadcasting means much of the current spectrum utilized by the broadcast industry shall be freed for use by the mobile operators.

“The mobile industry in Africa is booming and a catalyst for immense growth, but there is scope for far greater development…the analysis suggests that Kenya could have a total of 13.5 million broadband subscribers in 2020 and 17.4 million broadband subscribers in 2025, if additional spectrum is made available,” Peter Lyons, Director of Spectrum Policy, Africa and Middle East, GSMA said.

Dubbed Wireless Intelligence, the report indicates that if the spectrum release is delayed by 5 years, there will be no GDP stimulus until 2020, and the unrealised additional GDP as a result of the delay will rise from Sh1.8 billion in 2015 to Sh53.9 billion in 2019.
Similarly, the loss of general tax revenues due to the forgone GDP will rise from sh376 million in 2015 to sh11.3 billion in 2019.

“We forecast that the number of effective mobile broadband subscribers (MBB) subscribers in urban and rural areas will be 12.7 million by 2020, assuming additional spectrum is released. By contrast, if no additional spectrum is made available, the number will only be 6.3 million,” reads the report on Kenya in part.

Of the 6.4 million uplift in subscriber numbers, 2.1 million will be in rural areas and 4.3 million will come from urban areas. In 2025, the forecast number of subscribers is 16.1 million, assuming extra spectrum becomes available in 2015, compared to 7.8 million if no additional spectrum is issued. Of the base of additional subscribers, 5.4 million subscribers will be urban and 3.0 million will be rural.

There is more capacity than demand throughout the forecast period, in terms of the number of effective MBB subscribers, because Kenya has a relatively large rural population (nearly 80 per cent of the total population).

We assume that the service will be within the financial reach of a maximum of 70% of the urban population. This puts an affordability limit of 9.3 million effective mobile broadband subscribers on urban areas in 2020. Meanwhile, the enhanced urban capacity of network can accommodate up to 15.3 million subscribers.

In Kenya, around 78 per cent of the total population lives in rural areas. Although the vast majority of Kenya’s rural population relies on agriculture and is poor, urbanisation is gradually rising and will help to increase the overall population’s average income and disposable income. Data from the IMF suggests that by 2015, GDP per capita (at 2010 constant prices) will grow by around 17 per cent from the level in 2010.

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