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Ofcom Warns High Spectrum Prices Risk Unsold Frequencies, Slower 5G

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Ofcom Warns High Spectrum Prices Risk Unsold Frequencies, Slower 5G

2026-08-10 00:30 UTCBy AlphaScala Research DeskSource reporting: livemint.comEditorial standards

Ofcom Warns High Spectrum Prices Risk Unsold Frequencies, Slower 5G

Ofcom's David Willis warns that high spectrum reserve prices risk unsold frequencies and slower network rollout as 5G monetisation lags. He points to India's cost efficiency and flags early competitive concerns in satellite broadband.

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The UK's communications regulator warned that setting spectrum reserve prices too aggressively could leave radio frequencies unsold, delaying mobile network expansion at a time when video consumption is straining capacity.

David Willis, group director for spectrum at Ofcom, told Mint in London that regulators must calibrate reserve prices carefully. "You do have to be really careful with the reserve price," he said. "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."

The warning lands as UK mobile operators including BT's EE, Vodafone, and Virgin Media O2 prepare for future spectrum auctions. Past UK auctions drew operator criticism over high reserve prices that inflated costs and limited network investment, industry executives have said.

Willis said Ofcom's mandate is efficient allocation, not revenue maximisation. "It's not part of our legislative mandate to maximise the revenue from the auction. We use an auction to ensure an efficient allocation," he told Mint. "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."

5G monetisation remains "a bit challenged," Willis said, noting that the cost of living crisis in the UK is putting pressure on consumer spending. "We have not seen the massive killer app that we were anticipating," he said. Still, operators continue to invest heavily in network improvements, he added, and the regulator is fielding requests around net neutrality rules as carriers seek additional ways to monetise their infrastructure.

Willis pointed to India as a case study in keeping operating costs low. "It's amazing to see how affordable mobile [internet] has been in India and the ability for the companies to still be viable," he said. "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." He added that booming video consumption is making network capacity management "increasingly challenging."

On satellite broadband, Willis said the UK now has over 100,000 broadband connections through low-Earth-orbit (LEO) satellites, a number growing at a rapid rate. He noted that direct-to-device services have drawn interest and that satellite players have behaved "very complementary" to terrestrial networks so far. But he flagged early competitive concerns, particularly around the potential emergence of a mobile network in the US. Willis said mobile network operators in the UK have approached Ofcom seeking to offer satellite services through partnerships with Starlink.

Willis said different countries have different risk perceptions regarding satellite broadband approvals. He cited Venezuela, which gave emergency approval during an earthquake over a specific geographic area without granting universal approval. For countries like India, he suggested a balanced approach: "I think it's that balance of individual circumstance against your perceived risk."

Regarding 6G, Willis said deployment could be more measured unless a specific application drives rapid rollout. "You could see a more measured 6G rollout, unless there is a very specific application that drives rapid, large-scale deployment," he said. "It will really depend on the new applications that come along for 6G and incentivise those deployments."

The next UK spectrum auction timeline has not been set. Ofcom has not specified a precise reserve price threshold that would trigger unsold inventory, but Willis's comments signal the regulator is weighing operator viability against fiscal targets. If spectrum goes unsold, the gap between surging data demand and available capacity widens, potentially degrading service quality for consumers.