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July 4, 2017
UK mobile infrastructure player Arqiva has snapped up a 28GHz license covering London that could support a rollout of fixed wireless access (FWA) services based on the 5G standard.
The license, which Arqiva has bought from a managed services provider called Luminet, is for 2 x 112MHz of spectrum covering central and greater London.
Arqiva says the new spectrum will bolster its 28GHz capabilities: It already owns a nationwide 28GHz license and announced plans earlier this year for summer trials of 5G-based FWA services in conjunction with South Korean equipment provider Samsung Electronics Co. Ltd. (Korea: SEC), which is heavily focused on 28GHz-based technology. (See Eurobites: DT Makes Big NB-IoT Push.)
Arqiva now appears to be eyeing a commercial move into the residential broadband market, where its 5G technology could become an alternative to the fixed broadband services available from the likes of BT Group plc (NYSE: BT; London: BTA), Virgin Media Inc. (Nasdaq: VMED), TalkTalk and Sky .
The move for a 28GHz license in London suggests Arqiva is prioritizing a service launch in the UK capital.
But instead of providing services directly to consumers, Arqiva would sell wholesale offerings to mobile operators such as Vodafone UK and 3.
"5G FWA is an exciting opportunity to deliver true ultrafast broadband above 500 Mbit/s to millions of households; this is especially relevant in the UK where so few households are connected by fiber-to-the-home [FTTH] or fiber-to-the-cabinet technology," said Nicolas Ott, the managing director of telecom and M2M at Arqiva, in a company statement about today's spectrum deal.
"In purchasing this additional license we are able to further our ambitions in this area, standing ourselves in good stead to deliver a compelling 5G FWA wholesale service to UK mobile and fixed operators across the country, and with even more capacity in greater London," added Ott.
As Arqiva points out, the first 5G standard will form a part of the 3GPP's Release 15 update, which is due for completion in March 2018, although most stakeholders do not expect to see 5G services deployed in Europe before 2019 at the very earliest.
Arqiva did not disclose the terms of its deal with Luminet, but 28GHz spectrum has been priced at a premium in the US market, where telco giant Verizon Communications Inc. (NYSE: VZ) recently paid as much as $3.1 billion for a license holder called Straight Path Communications Inc. with 28GHz concessions covering cities including New York and San Francisco. (See Verizon Buys Straight Path for $3.1B, Beating AT&T to 5G Spectrum.)
Yet while there has been considerable hype about FWA technology and 28GHz spectrum in North America and parts of Asia, Europe's operators seem more interested in using 5G to support mobile broadband services over lower frequency bands.
That is partly because the region's fixed broadband markets are relatively developed in comparison with those in some regions of the US. In London, in particular, most properties are or can economically be connected to fixed broadband networks, although Arqiva may see an opportunity to undercut BT's wholesale pricing.
It could also try to market a higher-speed offering than is available on some older copper-based networks. BT has only recently started talking about investments in FTTH networks and G.fast, which boosts connection speeds on copper lines, and it will be several years before those technologies are more widely deployed. (See BT to Cover 2M Homes With FTTP in $8.7B Plan.)
BT's rivals may also want to cut their reliance on the incumbent operator, having previously complained about BT's control of last-mile infrastructure and pricing practices.
That said, recent regulatory moves to separate BT's Openreach access-networks business from the rest of the company could address much of the concern about BT's dominant infrastructure position. Besides giving Openreach its own management board, BT has also started to involve the likes of Sky and TalkTalk in discussions about network strategy and development. Vodafone, meanwhile, is warming to the idea of using Openreach's ducts and poles to roll out its own fiber network. (See Vodafone UK Turns Mobile Network Guns on BT/EE, BT Split Could Spur Vodafone to Invest in Fiber – Colao and Only BT's Dismemberment Will Sate Rivals.)
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There is also a question mark over Arqiva's 28GHz focus. While stakeholders in the US, Japan and South Korea are forging ahead with plans to run 5G services over 28GHz spectrum, the International Telecommunication Union (ITU) does not appear to regard 28GHz -- which has historically been used to support satellite services and fixed links -- as a candidate 5G band. (See Spectrum Hurdle Could Trip Europe in 5G Race.)
And those airwaves certainly do not figure in the plans of UK regulatory authority Ofcom. "When it comes to the pioneer bands for 5G, we have identified 26GHz and not 28GHz as the high frequency band," an Ofcom spokesperson told Light Reading.
Indeed, in a discussion document published as recently as February, Ofcom made zero mention of the 28GHz band, identifying the 700MHz, 3.4-3.8GHz and 26GHz ranges as 5G candidate bands.
While Arqiva already owns 28GHz licenses, of course, it is unclear whether the regulatory stance could hinder its 5G plans.
Light Reading asked Arqiva if frequency regulations were a concern, and why it saw an FWA opportunity in the developed London market, but was still awaiting answers at the time of publication.
Previous efforts to corner the FWA market have foundered, though. UK Broadband, a company owned by Hong Kong's PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) and trading under the Relish brand, was sold to Three UK earlier this year, having captured as few as 15,000 customers in London since launching FWA services in 2014. (See 3 to Bag 5G Spectrum With £300M UK Broadband Move.)
Arqiva owns about 8,000 tower sites across the UK and currently sells services to the country's mobile operators. In May, its owners were reported to have kicked off proceedings for a £6 billion ($8 billion) sale of the business.
— Iain Morris, , News Editor, Light Reading
Read more about:Europe
International Editor, Light Reading
Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).
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