A “new deal for 5G” is needed to tackle the causes of the 5G infrastructure investment gap, and catapult the UK to the global frontier for 5G connectivity. This report sets out the complex challenges driving the investment gap in 5G and presents a package of complementary measures which, if implemented together, can deliver the high-quality 5G network the UK needs in order to reap extensive economic and social benefits.
Key Points
- Britain is far behind the “global frontier” – the UK ranks 30th out of 39 countries for 5G availability, and 37th out of 39 countries for the quality of the 5G. We only get 5G connection for 10% of the time.
- Behind the UK’s poor 5G performance is a 5G infrastructure “investment gap” – expected to be in the range of £20 billion to £37 billion.
- Uncertainty over demand for 5G services: The one third decline in mobile network operator’s revenues since 2012 makes it difficult for them to justify the level of investment needed for widespread 5G by 2030. Relatedly, survey evidence suggests some reluctance to adopt 5G amongst both business and consumers, as they are content with what 4G offers.
- The structure of the mobile market: The mobile market structure has been complicated by the rise of Wireless Infrastructure Providers (or “tower companies”) who control a growing proportion of the UK’s passive mobile infrastructure. There is a need to study how their development has impacted levels of 5G investment.
- The current approach to spectrum policy: mobile network operators currently pay (via auctions or annual fees) obtain a license to use a portion of the UK’s electromagnetic spectrum. Both these costs, and the duration of the spectrum licenses have an effect on the levels of infrastructure investment.
- The supply of land and property for infrastructure sites: Since mobile infrastructure is typically installed on third-party land, a steady supply of land is crucial. However, this is complicated by recent changes to rules around rents that land providers can charge for the siting of mobile infrastructure.
- The operation of the planning system: Capacity, poor prioritisation of digital infrastructure, and uncertainty in the planning process have hindered the implementation of 5G infrastructure.
In this project, we’ve set out a “new deal for 5G” in the UK – looking at addressing all the factors driving the 5G investment gap
- Higher public sector involvement in stimulating demand for 5G services
- A serious look into market structure
- Cease auctions as the method of allocating spectrum, to be replaced with clearly defined 5G investment guarantees
- Reform the Electronic Communications Code
- Overhauling the planning system
