‘Poorly designed’ 5G spectrum auctions risk harming consumers, mobile operators warn
Multi-billion-pound auctions designed to flog 5G spectrum to mobile networks are badly-run and pose a risk to the rollout of the new technology, a new report has warned.
Research carried out by the GSMA, the trade body for mobile operators, revealed auctions across the world can artificially inflate prices, meaning operators may have to limit future network investment.
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“Auctions can and do fail when poorly designed,” said Brett Tarnutzer, head of spectrum at the GSMA. “We’re seeing a worrying trend of badly-run spectrum awards that could seriously impact the potential of 5G before we get started.”
According to the report, poor decisions such as artificially restricting the amount of spectrum operators can access and setting high reserve prices boost revenues for governments, but could ultimately harm consumers.
The findings came as part of a report into auction best practices, and the GSMA outlined a list of recommendations for future auctions.
The lobby group said more care must be taken in choosing lot sizes, and said auction holders should consider alternative award processes.
“The top priority for spectrum auctions should be to support affordable, high quality mobile services, not to maximise revenues,” the report stated.
The findings come at a crucial time for the UK’s mobile operators, as they race to roll out 5G in selected cities by the end of the year.
A report published last month by Barclays indicated the new high-speed network could add £16bn per year in business revenue to the economy by 2025.
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But the concerns around auctions compound existing fears about the UK’s readiness for 5G, with a possible ban on Chinese supplier Huawei already threatening to delay the rollout.
Regulator Ofcom, which holds spectrum auctions in the UK, declined to comment.