Sunday, 20 June 2021

UK 5G auction completes with a Vodafone–O2 spectrum swap

by Harry Baldock, Total Telecom
Wednesday 28 April 21

The trade will give O2 a contiguous 80MHz block of spectrum in the 3,720MHz to 3,800 MHz band, while Vodafone's 90MHz spectrum holdings will be moved much closer together

Last month’s auction saw a total of 200MHz of spectrum in the 700MHz and 3.6–3.8GHz bands sold in its entirety, raising £1.36 billion for HM Treasury.  The additional spectrum was represented a significant boost for the UK operators, increasing their spectrum portfolio by almost 20%. While all four operators took home new spectrum, BT and O2 seized the largest portions, with Three mostly content with its already comparatively large spectrum holdings…

Last month’s auction saw a total of 200MHz of spectrum in the 700MHz and 3.6–3.8GHz bands sold in its entirety, raising £1.36 billion for HM Treasury. 

The additional spectrum was represented a significant boost for the UK operators, increasing their spectrum portfolio by almost 20%. While all four operators took home new spectrum, BT and O2 seized the largest portions, with Three mostly content with its already comparatively large spectrum holdings, and Vodafone instead focussing on refarming its 900MHz spectrum to carry 5G. 

You can see our more specific coverage of the auction’s results here.

But exactly where within the specific bands the newly acquired spectrum would be located still needed to be determined via the auction’s allocation phase.

Now, this last phase of the auction has been completed, with BT adding an extra £23 million to the auction’s overall total, raising it to £1,379,400,000, in order to secure its preferred allocation position. 

But perhaps the bigger news here is that of a spectrum trade by Vodafone and O2, both of whom were seeking to make their overall spectrum holdings more contiguous. 

While contiguous spectrum holdings do not necessarily translate to a greater 5G performance for customers, it does allow for greater spectral efficiency and will ultimately prove important for supporting standalone 5G. Perhaps more importantly, if the spectrum being used for 5G is fragmented in a significant way, this can even require the various blocks to use different radio units.

Going into this latest 5G auction, it was only Three that enjoyed a largely contiguous chunk of 5G spectrum, leading Vodafone, Three, and O2 to pressure Ofcom to help them defragment their holdings. Ofcom, however, was reluctant, saying that to do so would be beyond their remit as a regulator and instead suggested that the operators arrange spectrum trades among themselves. 

It seems now, at the conclusion of the auction, that O2 and Vodafone have done just that, with O2 effectively swapping its 3,500–3,540MHz block for Vodafone's 3,720–3,760MHz block. The move will give O2 80Mhz of uninterrupted spectrum, while Vodafone’s 50MHz and 40MHz blocks will now be separated by just 40MHz, as opposed to the 220Mhz previously separating them. 

Being this close together should mean that the newer radio units are capable of handling both blocks, despite their separation. 

This move will leave BT as the biggest loser when it comes to defragmented spectrum, with their block of 3,540–3,580MHz spectrum separated by a minimum of 100MHz from their block of 3,680–3,720MHz spectrum. Perhaps worse, this trade between O2 and Vodafone leaves BT’s rivals with little motivation to trade spectrum and alleviate the problem.

 

How will these new spectrum holdings reshape the 5G landscape in the UK? Find out from the operators at this year’s live Connected Britain event

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