Why the UK lost its way in the global 5G leadership race

Why the UK lost its way in the global 5G leadership race

When the idea of a 5G initiative first emerged there was talk in Europe of a big opportunity to take the lead and create another GSM-like success story. The 2nd generation mobile technology (GSM) had been a huge success. Europe led the world for best part of a decade not just in mobile technology but its service provision. The UK particularly excelled in the latter. The UK government liked the idea and set an ambition in 2015 for the country to become a leader in 5G. Today 5G is being rolled out across the globe but the UK is not leading it. What went wrong?

This article presents the results of a study to determine this. The findings show a failure of coordination between the government’s 5G strategy and the independent regulator’s “competition and spectrum” regulatory strategies. They have been pulling in opposite directions. At the very time the UK needs to roll out a far more expensive high performing mobile wireless infrastructure, the regulator has been sucking excessive oxygen out of the UK’s infrastructure investment capacity in pursuit of their own agenda.

Diagnostic Study Methodology and its findings

A model has been created of the elements that need to come together for a country to successfully transition its national mobile infrastructure to a next generation mobile technology at scale.  It comprises three main clusters of components:

Collaboration model – This comprises all the things companies do together upstream  in the pre-competitive phase.

Regulatory Model – This comprises two distinct components: a competition framework and a spectrum regulatory framework

Financial (Capex) Model – Investments for national infrastructures will come almost entirely from the private sector and the business model has to make sense to the financial markets.

The deliver model has then been populated with the salient features that existed in the mobile network economy within two time slices thirty years apart. The first time period is 1991 when GSM was launched (called delivery model 2.0) and the second in 2021 when 5G is just being rolled out (called delivery model 5.0). Like a time-lapse camera, this captures the impact of cumulative changes brought about in different uncoordinated “silos” over such a long period of time.

Deliver Model 2.0

Delivery Model 2.0, shown in figure 1 below and populated with factual elements that were in place for the roll out of 2G (GSM)

Delivery Model 2.0

Figure 1 – Delivery model 2.0

Delivery Model 5.0, shown in figure 2 below and populated with factual elements that were in place for the roll out of 5G

Delivery Model 5.0

Figure 2 Deliver Model 5.0

Coloured in blue are all the elements going well and coloured in red are all the things that have gone wrong to achieve the necessary UK investment capacity to roll out 5G at scale. Glancing between figures 1 and 2 and the sea of red in the lower half of the illustration shows just how far the policy for a  successful upgrade of a national wireless infrastructure has gone off the rails.

Analysis

The salient features to note in model 2.0 (GSM) are:

  • the collaboration model and regulatory model pulled in the same direction (by design)
  • the mobile network investment cost for national coverage was low (due largely to the favourable spectrum bands used)
  • the revenues resulting from investment in GSM networks went almost entirely to the mobile network operators

The salient features to note in model 5.0 (5G) are:

  • the mobile network investment cost for national coverage has become high and in fact on an almost exponential curve with rising performance ambitions (data speeds and capacity)
  • the mobile network revenues have been drained off by the regulatory model for a number of ostensible “good causes”.
  • As a result, the collaboration model and regulatory model have been pulling in opposite directions.  The UK’s investment capacity for rolling out 5G at scale has been deflated by the regulatory models.

Conclusion

The government has done a credible job in supporting collaborative 5G research and stimulating exploration of the benefits of 5G in digital transformations. The standards body 3GPP has done a good job. The mobile operators and industry have pulled their weight. But all those collaborative efforts have been undermined by the Regulator travelling in a different direction with a quite different agenda. Whatever the merits of that agenda, such a lack of pulling together is a problem but a bigger one is the systematic deflation of the UK’s national wireless investment capacity. These are the challenges for the  government in any review of their national wireless infrastructure strategy.

 

(Note: the £27.5 billion is the total money the government and Ofcom has extracted from the mobile network economy in spectrum auction fees over the three generations of mobile technology since GSM)

Comments are closed.