Spectrum Wars Episode II: Attack of the Ofcom

In 2012, a controversial decision was made by UK telecoms regulator Ofcom to allow the UK's biggest operator, Everything Everywhere, to launch 4G services a year ahead of competitors. EE was able to achieve this through utilising their existing 1,800 MHz spectrum.

Rival mobile networks claimed the move was anti-competitive, and allowed EE to hold a monopoly of the 4G market for a significant period. It also allowed the network to use their unique position to make a financial gain and obtain further spectrum in the 2013 auction to secure their leadership.

Ofcom has announced their intention to hold another spectrum auction – this time of the 2.3GHz and 3.4GHz bands – in late 2015 or early 2016.

In attempt to reduce or eliminate the criticism Ofcom faced with their 2013 auction, the regulator claims the auction will be "designed to be fair and transparent and enable the spectrum to be awarded to those who can put it to the most efficient use and in the best interests of consumers."

The 2.3 GHz spectrum is used in 10 countries for 4G outside of Europe; including China, India, and Australia. Meanwhile, the 3.4 GHz spectrum is used for 4G in six countries. 190MHz of spectrum will be auctioned across the bands, and amounts to around three-quarters of the airwaves released by Ofcom in 2013.

Philip Marnick, Ofcom Spectrum Group Director, said: "Today marks an important step in ensuring that the UK has sufficient spectrum to support our wireless economy.

"It comes in response to the fast pace of change and innovation taking place in the communications sector, which is placing increased demands on how spectrum is used by all industries. One important way of meeting this demand is making new spectrum available and its use as flexible as possible."

The airwaves being auctioned were previously used by the Ministry of Defence and are now being let loose for civil-use as part of a government initiative to free-up public sector spectrum. Ofcom has invited potential bidders to comment on proposals for the bands.

2013 Results

 

Winning bidder 

Spectrum won 

Base price 

Everything Everywhere Ltd 

2 x 5 MHz of 800 MHz and 2 x 35 MHz of 2.6 GHz 

£588,876,000 

Hutchison 3G UK Ltd 

2 x 5 MHz of 800 MHz 

£225,000,000 

Niche Spectrum Ventures Ltd (a subsidiary of BT Group plc) 

2 x 15 MHz of 2.6 GHz and 1 x 20 MHz of 2.6 GHz (unpaired) 

£186,476,000 

Telefónica UK Ltd 

2 x 10 MHz of 800 MHz (coverage obligation lot) 

£550,000,000 

Vodafone Ltd 

2 x 10 MHz of 800 MHz, 2 x 20 MHz of 2.6 GHz and 1 x 25 MHz of 2.6 GHz (unpaired) 

£790,761,000 

Total 

 

£2,341,113,000 

 

A total of 250 MHz of spectrum was auctioned in 2013 across two separate bands - 800 MHz and 2.6 GHz. The lower-frequency 800 MHz band is part of the ‘digital dividend’ freed up when analogue terrestrial TV was switched off, and is ideal for widespread mobile coverage. The higher-frequency 2.6 GHz band is ideal for delivering the capacity needed for faster speeds.

What do you think about Ofcom’s handling of 4G spectrum auctions? Let us know in the comments.

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