A recent report from U.K. media and telecom regulator Ofcom served to highlight that the market’s four mobile network operators (MNO) still have their work cut out if they are to meet ambitious government targets for the widespread adoption of standalone (SA) 5G coverage by 2030.

Indeed, Ofcom’s latest Connected Nations report published in December 2023 indicated that while 5G non-standalone population coverage is now at a relatively high level of 93% of U.K. premises (from at least one MNO), landmass coverage is much lower, ranging from 11% to 38% at the high confidence level of availability, and 6% to 26% at the very high confidence level.

5G SA deployments, meanwhile, are still at a relatively early stage, with only Vodafone UK and Virgin Media O2 having announced commercial launches.

The problem, as the MNOs point out, is that 5G networks, especially 5G SA networks that are cut loose from the old 4G core, are expensive to deploy. Mobile UK, the trade association for the four MNOs, is now calling for an urgent change in the investment environment if 5G SA deployment targets are to be met by 2030.

Mind the investment gap

According to a new report released by Mobile UK and prepared by the White Hawk Group, even though the sector is investing close to £2 billion each year to improve mobile coverage and deploy 5G, the sector will need to boost investment by up to a further £25 billion to meet the government’s target.

Notably, the Digital Connectivity Forum (DCF) has already indicated that the investment amount projected for 5G by 2030 falls up to £25 billion short of what is required to realize the full potential of the technology.

The Mobile UK report makes four key recommendations that it believes could help tackle the perceived investment shortfall and accelerate deployment. These are broadly:

  • At a minimum, follow through on policies and actions outlined in the WIS.
  • Explore further policy actions designed to remove barriers to network rollout.
  • Implement fiscal measures that will have a direct and immediate impact on improving the MNO investment outlook.
  • Consider further actions that can be taken to support private capital being deployed in the U.K. by mobile operators.

Hamish MacLeod, CEO of Mobile UK, summarized what MNOs specifically want to achieve: “Reductions in spectrum license fees, reforming traffic management regulations and business rates holidays for new mobile infrastructure would incentivise investment. In addition, adequately funding the planning system and appointing digital champions in local authorities would help streamline network rollout and get the U.K. back on track to achieve its targets,” he said.

Underlining the essential role that telecom plays, MacLeod further noted that every £1 invested by the MNOs generates a £5 return to the wider economy, “and so enabling a positive investment environment for the sector must be the clear priority of government.”

To be sure, Mobile UK frequently calls on policymakers to take heed of the challenges that operators face. It remains to be seen whether or not the government will act on the latest recommendations any time soon, particularly given that MPs are somewhat distracted right now by a looming General Election, the date of which has yet to be confirmed.

The U.K. mobile market could also see a structural change if a merger of Vodafone UK and Three UK takes place. The Competition and Markets Authority (CMA) recently began an in-depth investigation into the proposed transaction. Vodafone UK has already suggested that the merger would bring considerable benefits including a faster deployment of 5G SA.

Deployment woes

Meanwhile, U.K. MNOs are not alone in calling for action to improve the conditions for building 5G networks. In Germany, for instance, operators such as Deutsche Telekom regularly complain about the difficulties in obtaining permits to erect sites, excessive bureaucracy and, of course, the high cost of spectrum licenses and auctions.

Germany’s regulator, Bundesnetzagentur, has already indicated that it is considering scrapping spectrum auctions for rights in the 800 MHz, 1800 MHz, and 2.6 GHz bands that are due to expire in 2025.

In the U.K., Ofcom has confirmed that it will open the 26 GHz and 40 GHz spectrum bands to mobile technology, including 5G services, and is already planning an auction for these frequencies. Each lot will comprise of a block of 200 MHz. The reserve prices will be £2m for each lot of 26 GHz lower and 26 GHz upper, and £1m for each lot of 40 GHz.

As for the rollout of 5G SA around the world, deployments are growing but remain at a low level. According to the March 2024 update from the Global mobile Suppliers Association (GSA), 49 operators have deployed, launched or soft-launched public 5G SA networks.

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