3G, 4G and now 5G: is anything worth doing worth overdoing?

It’s that time again. It’s been five years since we last had an auction of mobile spectrum. Ofcom held its 4G auction in 2013 with EE the first to launch 4G services. But do we really need 5G – and can operators afford to pay for it?

Since then data usage has risen exponentially, and at the same time prices have fallen dramatically. Back in 2012/13 when 4G was first available standard data bundles were 100MB, 500MB and 1GB, with the average customer using around 250MB – this is the equivalent of using all your data for the entire month just by streaming a single TV programme. Nowadays 20GB seems a fairly standard allowance based on my straw poll around the office.

This time around it’s all about 5G. Ofcom had planned to auction off high capacity spectrum in the 2.3GHz to 3.4GHz range in 2017, though a legal challenge from Three has delayed this. It claims Ofcom’s rules for spectrum allocation could enable larger operators like EE to snap up an unfair slice of the pie. However the auction is now expected in 2018, with Ofcom keen to ensure it is in a position to move as quickly as possible to hold the auction once the judgment of the Court of Appeal rules on Three’s concerns in mid-February.

Mobile data revenue is expected to increase over the next five years. Note though that overall mobile service revenue is expected to decline, driven by falling voice revenue. Who really cares about voice any longer anyway? We all much prefer a perfect internet experience from our smartphones. In a recent blog, my colleague BMM looked at our expectations and rights when it comes to internet access and how mobile coverage is expected wherever we are.

So with mobile data revenue increasing, how much will the operators be prepared to pay for 5G? The 4G auction in 2013 raised £2.3 billion compared to the 3G auction that raised £22 billion in 2000. This time around my guess is that we are unlikely to see a bidding frenzy, but it will be interesting to note what the 2018 market rate will be. The first spectrum will be nowhere near enough to satisfy our need for speed, so there will be further auctions sometime in 2020. But the increased role of data in our lives means it’s important for all the operators to be in the running and to get 5G right from the beginning.

The first public 5G networks are expected to roll out in the UK in 2020. But will the mobile operators make any money from their huge investments?

I can’t help but feel that the mobile networks will be punished for earlier misdeeds in life. In Greek legend Sisyphus was punished for his misdeeds by being condemned eternally to roll a heavy stone up a hill one day, only to find that overnight it had rolled back down the hill and he had to endlessly repeat the task - so that his labour was everlasting and futile.

I have a feeling that the mobile industry continuously pushes its own rock up the hill, spending huge amounts of time and money in deploying new networks, only to find the gods of the latest technology and new competition soon roll the rock back down hill, and the investment climb repeats.

Perhaps its innovation that’s missing from the mobile operators roadmap as most people just consider the network as literally a carrier, with all the innovation expected from and coming from the device manufacturers or application developers.

When is 6G coming, anyway?