Vodafone UK reportedly urged the government to abandon a forthcoming 5G spectrum auction, fearing a cash-crunch as it moves to comply with a government order to replace Huawei kit.

Nick Jeffery, the operator’s CEO (pictured), told Financial Times (FT) it made the plea after regulator Ofcom rejected its suggestion to award 5G spectrum instead of auctioning it.

The newspaper stated Vodafone proposed distributing the spectrum to the UK’s four major operators for a reserve price of around £1.2 billion.

Removing Huawei equipment is expected to cost operators up to £2 billion. Jeffery told FT the sums mean it is now time “to focus on ensuring operators can still afford to invest in the network this country deserves”.

He noted the UK’s telecom sector delivered one of the lowest RoIs in the world. Spectrum allocation could help accelerate the rollout of 5G, while also addressing potential frequency fragmentation issues, FT said.

Ofcom initially planned to auction 5G frequencies early this year, but the sale was postponed due to the Covid-19 (coronavirus) pandemic.

In May it said the auction would be held in November at the earliest. The sale will cover spectrum in the 700MHz and 3.6GHz to 3.8GHz bands.