Despite 4G accounting for 66.6% of total mobile subscriptions in the UK in 2019, its share will decline over the forecast period to reach 50.9% by 2024 over customers migration to 5G, subject to a successful spectrum auction.

We expect 5G subscriptions to account for 39.9% of all mobile subscriptions by 2024. The success of the upcoming 5G auction is integral to 5G rollout timelines, with 5G coverage of the majority of the population promised for 2027 under the UK Government’s 2021-2027 Future Telecoms Review.

UK telecom regulator Ofcom’s awarding of 5G frequencies in the 700MHz and 3.6GHz-3.8GHz frequency bands, delayed by Covid-19, will occur at the earliest in November 2020.

5G spectrum auction rules

Ofcom is following new 5G-suitable spectrum auction rules to award 80MHz of spectrum in the 700MHz band and 120MHz in the 3.6GHz-3.8GHz bands with no obligation on coverage for winning bidders. Ofcom has also outlined that there will be a cap of 416MHz on the total amount of spectrum assigned to any MNO.

Ofcom’s position on this process is further guided by the necessary consultation on, for example, modeling, and technical matters. With 5G being integral to the digital transformation of many verticals, changes to the Ofcom’s conclusions – as set out in the consultation on 12 June 2020 and in the statement published on 13 March 2020 – must be done with a range of stakeholders in mind. As such, if there is no litigation on Ofcom’s final decision following this consultation, the earliest bidding could start in November 2020.

Forced supply chain diversification could affect 5G roll out in the UK

The award of 5G frequencies in the 700MHz and 3.6GHz-3.8GHz frequency bands in 2020 and operators’ investment in 5G networks rollout will create new opportunities for consumers, businesses, and the vertical industries.

The UK’s DCMS (Department for Digital Culture, Media & Sport) announced in April a GBP30m funding, through the 5G Testbeds and Trials Programme (5GTT), for innovative 5G use cases for vertical industries, UK regions and businesses, as well as for projects addressing key challenges faced in the current 5G telecoms supply chain and infrastructure – e.g. diversification of supply chain, open RAN, and network security.

With the recent ban on Huawei 5G equipment in the UK and the requirement imposed on telcos to remove the equipment from their networks by 2027, supply chain diversification – e.g. through new vendors and exploring new architectures like Open RAN – is of a paramount importance to support 5G timely rollout in a cost-efficient manner.

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