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The headline picked up in Ofcom’s discussion documents on the future of mobile markets and spectrum was that the UK regulator seems open to the idea of idea of mobile operator mergers, as Ofcom it is now “clarifying our position on mobile consolidation”. 

Beyond the headlines, and where the market may or may not go, there is much to note in the two new papers.  

Future approach to mobile markets 

Compared with ten years ago, today sees where the significant shift in mobile use has taken the UK to: most calls are now made from mobile phones, rather than landlines, with UK adults now spend on average two hours a day online on their smartphones. But increasingly, mobile networks are just part of the range of different wireless technologies people use to meet their needs at different times, whether that is using Wi-Fi at home or work, or mobile networks when we are on the go. 

And this tech use sits within the context of the range of “data-hungry” digital services enabled by technology that is set to increase through the 2020s—from video streaming and calls—to AR/VR and automation.  

There is significant information from the regulator on how it expects the UK’s mobile market to continue to deliver good outcomes and experiences for consumers of mobile services, as expected. However, we have summarised the notable points raised by Ofcom on its future regulation and how it sees the investment picture developing through the next decade: 

• There has been significant, ongoing investment in mobile networks, and this has been driven by strong competition. However, with a nod to its current review into the Net Neutrality framework, Ofcom notes the role Big Tech is playing in the provision of mobile devices, operating systems, apps and content.  
• Ofcom expects mobile services to become more important over the coming years, with a significant increase in data use and a growing demand for higher quality mobile services.  
• There is an expected rise in the use of private mobile networks in industry and the public sector, driven by new use cases and emerging technology.  
• A change in how mobile networks are provided: 5G standalone will play a part here. Ofcom recognises a potential shift in the ways MNOs could separate out their infrastructure from their services, and we may see more infrastructure sharing, or new network sharing and ownership models emerge.  
• Ofcom sees a greater role for hyperscalers in the provision of networks and cloud IT services as bringing benefits but could “also raise risks longer term” 
• Finally – Ofcom has recognised that the mobile providers have said that regulation, either introduced by Ofcom or other bodies, has reduced their financial returns by imposing additional costs and reducing their commercial flexibility to generate revenues (ALFs, consumer regulation, and network security). Ofcom says it plans to set out more explicitly how we have considered investment when making future policy decisions. 

You can read the full discussion document here. Ofcom welcomes further evidence and views in response to this discussion document by 8 April 2022.  

Mobile networks and spectrum: Meeting future demand for mobile data 

In tandem with the mobile market paper, Ofcom has also published a discussion document of its initial thinking on future demand for mobile services and how mobile networks may need to evolve to meet that demand.  

Ofcom notes that mobile data traffic has grown by an average of 40% year on year in recent years and it expects this to continue. However, there is a high degree of uncertainty about the rate of future growth, particularly beyond 2030. Mobile networks will need to evolve to meet future demand and deliver the quality of experience needed by consumers and businesses. There are a number of ways in which they might do this, including: 

1. More extensive deployment of existing spectrum holdings and planned future spectrum for mobile e.g. in the millimetre wave (mmWave) bands. 
2. Using technology upgrades to increase the efficiency of the spectrum they use;  
3. Network densification – deploying more cell sites – in particular using small cells to leverage the capacity offered by the large bandwidths available from mmWave spectrum. 

The paper details the growth of UK demand for mobile data, and how mobile networks have evolved in response to this demand, and the spectrum made available to do so. Ofcom recognises that some services offered by mobile networks are being delivered by other technologies, including Wi-Fi and satellite.  

Many uncertainties remain about future use, however: Uncertainty around new applications, and around application and device take-up; Investment and deployment; Pricing decisions; Uncertainty around traffic location; and developments in other technologies.  

Ofcom anticipates that mobile networks will need to evolve to meet future demand for mobile data and sees a number of strategies available, including technology upgrades, making full use of existing spectrum holdings, and densification, including by deploying new mmWave spectrum using small cells. On densification specifically, Ofcom sees this as necessary in the medium to long term to meet anticipated growth in demand, including the use of mmWave spectrum in capacity constrained locations.  

For the full discussion document – head to the Ofcom website. As above, the regulator is seeking views of stakeholders, with the deadline of 8 April 2022.  

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techUK's Communications Infrastructure Programme brings together government, the regulator, telecom companies and its stakeholders around four themes; shared infrastructure, security and resilience, unlicensed spectrum and our 5G ecosystem. We do so to lower the cost to the sector of deployment, ensure confidence in networks, spur innovation and unlock value for all parties in 5G. This is delivered through a mix of thought leadership, multilateral engagement and ecosystem building.