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Tuesday, 24 September 2013

Reasons for the low take-up of mobile broadband in Slovenia

The latest global broadband report, released on Saturday by the United Nations Broadband Commission, reveals an astonishingly high global growth rate in mobile broadband subscriptions of some 30%. This is the highest growth rate of any ICT. In 2012, it exceeded fixed broadband subscriptions by a ratio of 3:1 (up from 2:1 just two years ago).

Slovenia has dropped seven ranks in mobile broadband penetration to 43rd place in the 2013 global broadband report. The decline is in large part attributable to a slower adoption of mobile broadband technology despite the growth of subscriptions in 2012 was still remarkably high at 26,6%. Slovenia has lost two places and is 22nd amongst 28 EU member states. What is worrying is the gap between the economies with highest mobile broadband penetration that is three times higher than in Slovenia.

The Digital Agenda Scoreboard data confirm the UN Broadband Commission ranks. Mobile take-up in Slovenia is amongst the lowest in the EU. Moreover, Slovenia is 28th amongst EU member states in mobile broadband penetration of dedicated data services (i.e. cards, modems, keys).

The main reasons for the low take-up of mobile broadband in Slovenia are a lack of political leadership and, hence, of a national broadband plan and broader information society development plan, in responsibility of the Ministry for Education, Science and Sport, misuse of public funds previously invested in the deployment of broadband networks in rural areas, (alleged) abuses of the dominant position by Telekom Slovenije, that prevented the establishment of mobile networks for the provision of competitive mobile broadband services, inactivity of the national competition authority, and improper spectrum management, which is the responsibility of the national regulatory authority (APEK).

Henisz and Zelner (2001) in their study on the institutional environment for telecommunications investment found that institutional determinants of political risk were important predictors of the level of new investment. Henisz (2002) confirmed a statistically and economically significant link between political institutions and infrastructure growth.

Slovenian mobile operators have been facing regulatory uncertainty in recent years and the situation has worsened since 2011. The national broadband plan is now 5 years old and has been outdated. The ministry consulted on initial broadband plan thinking two years ago but then froze all activities.

National policy leadership is required to provide a clear vision to identify opportunities, constraints and actions around the supply and demand of broadband. Without strong policy leadership, the regulator has ignored the spectrum policy goals set by the government and enacted by the National Parliament. 

The 800 MHz spectrum, freed in 2011 for mobile broadband use, has been lying unused ever since as the regulator has simply ignored the National and EU policy goals, legal obligations as well as the mobile operators, who have explicitly expressed interest in the 800 MHz spectrum. The spectrum will now be offered as a part of a multiband auction, scheduled for March 2014 at the earliest. That means that mobile broadband services in the 800 MHz spectrum will not be commercially available before 2015.

Slovenian policy makers and the regulator have underestimated the importance of mobile broadband. According to the UN Broadband Commission, mobile internet is changing the world, driving far-reaching social and economic transformations through new services and changes in consumer habits. Therefore, it is not merely about the place in the report, but about the far reaching changes brought about by mobile broadband technology. As European Commission Vice President Neelie Kroes said: "Every delay in releasing spectrum hurts our economy and frustrates citizens."

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