The UK's Office of Communications (Ofcom) is the country's communications regulator and competition authority. Its group director for spectrum David Willis, in an interview with Mint at London headquarters, said spectrum reserve prices must be set carefully, as 5G monetization remains "a bit challenged". Willis noted that Indian telecom operators have remained viable in spite of the "affordable" data prices. He said that in the satellite broadband space, the UK has more than 100,000 broadband connections through low-Earth-orbit (LEO) satellites. Willis said countries like India could adopt a balanced approach to satellite broadband approval to expand connectivity.
Edited excerpts:
In India, telcos often complain about high spectrum reserve prices. Do you think that affects network rollout?
You do have to be really careful with the reserve price. (At OfCom), we often set them conservatively, because we would like to clear the spectrum. It's not going to be in use if it's sitting on my shelf and if it didn't get auctioned, because we set too high of a reserve price. There might be certain geographies, where you are concerned that it's not competitive, then you might set a higher reserve price. This is to make sure that in parts of your country, where it may not be competitive, you're not just giving the spectrum away.
Will lower spectrum prices bring affordability and telcos could participate more?
Correct. And you tend to want competition.
What is your view on auctions as a revenue stream for governments?
A. It's not part of our legislative mandate to maximise the revenue from the auction. We use an auction to ensure an efficient allocation. Absolutely, the Treasury appreciates the revenue that comes along with it. And they would like us to estimate it. In some cases, those funds have been traded off, not just here, but in other countries, for network deployment requirements.
India has one of the lowest mobile data prices. How do you see it?
India is a very different market. The UK has relatively competitive and quite low prices in a European context. It's amazing to see how affordable mobile (internet) has been in India and the ability for the companies to still be viable. The interesting thing, more for the operators (here in the UK), would be to learn about how India was able to keep operating costs down. But I think as video consumption booms, managing network capacity constraints has become increasingly challenging.
How do you see the monetization happening in 5G services in the UK?
Monetization is a bit challenged. Cost of living is a big issue. We are having asks around net neutrality rules and other issues that the carriers may see as additional ways to monetize. But we are still seeing heavy investment in the networks and a desire by those carriers to make those networks better. We have not seen the massive killer app that we were anticipating.
Do you think the 6G rollout will be delayed?
You could see a more measured 6G rollout, unless there is a very specific application that drives rapid, large-scale deployment. It will really depend on the new applications that come along for 6G and incentivise those deployments.
How has been the UK’s experience with satellite internet?
The services and connectivity that are being enabled in the places that were previously unaddressable, is pretty amazing. We have over 100,000 broadband connections through LEO (low earth orbit) satellites today, and it's growing at a rapid rate. We saw pretty good interest in direct-to-device (D2D) services as well. We have seen the players come in and behave in ways that have been very complementary today, so it hasn't sort of driven competitive concerns. However, we are beginning to see early signs of competitive concerns, particularly around the potential emergence of a mobile network in the US.
India is concerned about security implications if satellite internet is allowed. What do you think?
The service that is being used right now makes it less of a concern. We had MNOs (mobile network operators) coming to us and saying, we want to offer it either through a partner or through a partnership with Starlink.
I think different countries have different risk perceptions. If you were looking at a very secure government service, it might not be going over one of these more flexible channels, but if you have got a consumer service, you are not concerned much there besides ensuring security of their data.
For example, in Venezuela they gave emergency approval during the earthquake over a specific geographic area. It doesn't mean they allowed universal approval because they still have concerns. But I think it's that balance of individual circumstance against your perceived risk. In countries like India too, a balanced approval can be looked at.
What about India's worry that inter-satellite links could allow data to be routed outside the country?
I think this is a tough one. We imposed requirements like everybody else around data integrity. Fundamentally, it comes down to whether you trust the supplier or not. And you really have to look at - what's the affordability of building your own solution versus the value versus the trust, and can you secure your data in other ways, through encryption? We have seen other companies raise the inter-satellite links issue, but their networks are less resilient because they are not using inter-satellite links. They are now dependent on a single gateway and that is a security risk to your data in a different way. So how do you measure those trade-offs?