5G is coming to the UK and bringing with it a whole host of opportunities, but a shedload of problems for the companies that want to use it.
The fifth generation of mobile networking will be succeed 4G sometime in 2018 and promises streaming and download speeds 10 times faster than anything we’ve seen before.
But the companies who have to bid to grab a slice of 5G are not happy.
The industry regulator Ofcom wants to parcel out large chunks of bandwidth and has set a relatively high limit preventing any one mobile provider from buying any more than 37% of the available 5G spectrum.
For the smaller companies that number is still much too high.
Three want the cap to sit at a much lower 30% to give encouragement to smaller providers. BT-owned EE and Vodafone are the major players in terms of 4G mobile data in the UK, each owning 42% and 29% of the useable mobile spectrum. O2 has around 15% while Three holds only 14%.
Three has been calling for this 30% cap since the 4G spectrum went to auction back in 2013. It lost out to BT and EE big time back then when Ofcom refused to back its limit idea, and has been playing second fiddle in terms of data and customer numbers ever since.
This time around, Three’s Singaporean owners CK Hutchinson Holdings hoped it would all be different. But their overtures to Ofcom didn’t work and now Three has taken the next step and taken Ofcom to court.
The dispute over the terms of the auction will run and run.
5G will certainly be a multi-million pound moneyspinner for mobile providers. Getting it wrong now and getting locked out of access to 5G spectrum will cost companies big money over the next 10 years.
Vodafone told The Financial Times that Three’s legal action against Ofcom will put unnecessary delays on 5G which will hurt UK customers in the long run.
“This is not in the interest of consumers and will undermine the UK’s efforts to be a leading digital economy,” a Vodafone spokesperson said.
5G will be really, really fast
According to the Next Generation Mobile Networks Alliance, 5G will be achieved when a network delivers:
- 1Gbps minimum data speeds
- 99.999% availability
- 90% reduction in energy consumption
- 10Gbps speeds in built-up city areas
- 1ms round-trip latency
- 100x higher connection capacity than 4G
All boils down to 5G spectrum cap
A spectrum cap is not the latest in hipster headgear, but a limit on the amount of bandwidth any mobile provider can own, in order to offer 5G services to their customers.
Ideally Ofcom wants to avoid the situation it has with Openreach and broadband, where only one company effectively owns the entire of the country’s broadband and leases out bits of it to other companies. In theory, monopolies are bad for the customer because they promote less choice and fewer options, as well as hiked-up prices.
In July the government announced a fund of £16m shared between three universities to get the country’s first 5G test network up and running.
Commercial trials will then start investigating how the revolutionary new 5G technology could work, including self-driving cars, advanced robotics, remote surgery and smart homes where every device from fridges to door locks to heating controls are connected together with WiFi.
No-one really knows how much 5G is going to be worth to the UK economy. O2 put out a conservative estimate of £10bn in an April 2017 report, while the government has set out a figure of £173bn.
A spokesperson for Three said: “We confirm that we have filed a judicial review before the UK courts in relation to the competition measures that will apply in the upcoming spectrum auction. It is absolutely vital that the regulator gets this auction right for the long-term benefit of all consumers.”
While a decision from the courts could come by early 2018, all this points to a major delay in bringing 5G to the general population.