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  • 5G operators in the UK get a second helping of spectrum, but is there still a ghost at the feast?

5G operators in the UK get a second helping of spectrum, but is there still a ghost at the feast?

31 October, 2019 at 2:55 PM

Posted by: Anasia D'mello

5G operators in the UK get a second helping of spectrum, but is there still a ghost at the feast?
John Delaney of IDC

5G in the UK has assumed an elevated importance in recent years. To mitigate some of the economic damage that Brexit is inflicting, says John Delaney, IDC’s associate VP for Mobility, the UK needs to ensure that as many of its businesses and consumers as possible have access to good broadband connectivity, so that they can participate fully in the growing digital economy. 5G has a key role to play in achieving that goal.

Accordingly, the UK has been at the forefront of bringing commercial 5G to market, enabled in part by the early availability of spectrum, following regulator Ofcom‘s April 2018 auction of licences in the 3.4GHz range. Today, Ofcom has announced that a second tranche of 5G spectrum will be made available to UK mobile operators in the Spring of 2020. Additional 5G capacity will be catered for by spectrum in the 3.6-3.8GHz range; while operators’ ability to widen 5G coverage cost-effectively will be enhanced by spectrum in the 700MHz range. More details can be found here.

An interesting aspect of the upcoming auction is that, unusually, there will be no minimum-coverage obligation associated with the licences for the new spectrum. The reason for this is that the UK operators and government recently agreed to build a jointly funded Shared Rural Network, to bring (4G) mobile to so-called “not-spots”, that is, rural areas that currently lack mobile network coverage.

The Government has been keen for a long time to do something about not-spots, as discontent about poor coverage among rural voters has become a pressing political issue. However, efforts to address the issue by requiring operators to give each other’s customers access to their networks (so-called “national roaming”) have met stiff opposition from the operators, who have argued that it will damage the case for investing in coverage. The Shared Rural Network is a less contentious solution for cost-effectively widening coverage while maintaining competition at the retail level.

Ofcom is also addressing the long-term maintenance of competition in another interesting aspect of today’s announcements. It will introduce a cap of 37% on the percentage of the total amount of licensed spectrum that any individual mobile operator can hold. This is an important corollary of not imposing a minimum-coverage obligation.

It ensures that an operator cannot weaken competition in the long term, by cornering a much larger amount of spectrum that it needs for its own future capacity needs. The introduction of a holding cap has in the UK been anticipated for some time – we noted here, for example, that this may have been a factor in Vodafone’s decision not to bid for any 2.3GHz spectrum in the April 2018 auction.

So the UK operators are in for a second helping of 5G spectrum; but there may still be a ghost at the feast. The long-running controversy over whether Huawei should be excluded from supplying equipment for the UK’s telecoms networks could still have a major impact on the UK’s ability to remain at the forefront of 5G. There is already a lot of Huawei equipment in the UK’s 4G networks and in the 5G networks that have been rolled out so far. A ban would require this equipment to be replaced, setting back the rollout of mobile broadband connectivity by 1-2 years, and imposing major new costs on the UK’s mobile operators.

There was a glimmer of hope on this issue last weekend, when the UK’s Sunday Times newspaper reported that the UK government is about to announce a decision in favour of Huawei. Those who want to keep the UK in the 5G vanguard will be hoping that the government has, indeed, finally decided to defy pressure from the US to impose a Huawei ban.

The author is John Delaney, IDC’s associate VP, Mobility

Comment on this article below or via Twitter: @VanillaPlus OR @jcvplus


category: 5G, Connectivity, Network optimisation, Troubleticket

Tags: Huawei, IDC, John Delaney, Ofcom, telecoms

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