Thursday, 27 July 2017

UK operators angered by Ofcom 5G auction caps

Total Telecom Staff
Tuesday 11 July 17

Ofcom has announced how it will release spectrum for 5G mobile services, including new measures to safeguard competition, which UK operators have heavily criticised.

The regulator is to auction licences to use 190 MHz of spectrum in two frequency bands, increasing the airwaves available for mobile devices by almost one third. 40 MHz of spectrum will be auctioned in the 2.3GHz band. These airwaves could be used immediately after release to provide extra capacity, meaning faster downloads and internet browsing for mobile users…

The regulator is to auction licences to use 190 MHz of spectrum in two frequency bands, increasing the airwaves available for mobile devices by almost one third. 40 MHz of spectrum will be auctioned in the 2.3GHz band. These airwaves could be used immediately after release to provide extra capacity, meaning faster downloads and internet browsing for mobile users.

In addition, 150 MHz of spectrum will be auctioned in the 3.4GHz band. These airwaves are not compatible with most current mobile devices, but are expected to be usable by future phones and tablets. The 3.4GHz band has been identified as central to the rollout of 5G mobile across Europe. 5G spectrum auctions have recently completed in Ireland, raising €78 million.

Ofcom will impose two different restrictions on bidders aimed at limiting the amount of spectrum operators can win in the 2.3GHz band; and placing overall limits on the spectrum an operator can win across the 2.3GHz and 3.4GHz bands in aggregate.

A cap of 255 MHz on the “immediately useable” spectrum that any one operator can hold as a result of the auction means BT/EE will not be able to bid for spectrum in the 2.3GHz band.

An additional cap of 340 MHz on the overall amount of mobile spectrum a single operator can hold as a result of the auction amounts to 37% of all the mobile spectrum expected to be useable in 2020, which includes not only the spectrum available in this auction but also the 700MHz band.

The aim is to preserve competition by limiting the spectrum available to the UK’s largest operators, protecting the positions of O2 UK and 3UK, which is investing in a fixed wireless strategy. Taken together, the effect of the caps will be to reduce BT/EE’s overall share of mobile spectrum; the company can win a maximum 85 MHz of new spectrum in the 3.4GHz band. The overall cap also means that Vodafone could gain a maximum 160 MHz of spectrum across both the 2.3GHz and 3.4GHz bands.

Philip Marnick, Ofcom’s Spectrum Group Director, said: “We’ve designed this auction to ensure that people and businesses continue to benefit from strong competition for mobile services. We want to see this spectrum in use as soon as possible. These new airwaves will support better services for mobile users, and allow operators to innovate and build for the future.”

Operators O2 UK and 3 UK say the caps fall short of what’s needed to secure competition and 3 UK has threatened legal action. EE, which shareholder Orange is looking to exit, believes the caps are unnecessary.
 

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