In 2012, the UK telecoms regulator Ofcom made a contentious decision to allow the country’s largest operator, Everything Everywhere (EE), to roll out 4G services a year earlier than its rivals. EE achieved this advantage by using its existing 1,800 MHz spectrum.
Competing mobile networks criticised the move as anti-competitive, arguing it granted EE a temporary monopoly in the 4G market. Critics said this early lead allowed EE to strengthen its market position, capture additional revenue, and later acquire more spectrum in the 2013 auction to cement its leadership.
Ofcom has since announced plans to hold another spectrum auction covering the 2.3 GHz and 3.4 GHz bands, expected in late 2015 or early 2016.
In response to the criticism surrounding the 2013 auction, Ofcom emphasises that the new 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 band is already used for 4G in several non-European countries, including China, India and Australia, while the 3.4 GHz band is deployed for 4G in a smaller group of countries. Together, roughly 190 MHz of spectrum will be auctioned across these bands, equating to about three-quarters of the airwaves Ofcom released in 2013.
Philip Marnick, Director of Ofcom’s Spectrum Group, commented: “Today marks an important step in ensuring that the UK has sufficient spectrum to support our wireless economy.” He added that the move responds to the rapid pace of change and innovation within the communications sector and the rising demands this places on spectrum use. “One important way of meeting this demand is making new spectrum available and its use as flexible as possible.”
The bands being offered were formerly used by the Ministry of Defence and are being released for civil use as part of a government initiative to free up public-sector spectrum. Ofcom has invited potential bidders to submit views on the proposals for these 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 |
In 2013 a total of 250 MHz of spectrum was auctioned across two bands: 800 MHz and 2.6 GHz. The lower-frequency 800 MHz band—part of the “digital dividend” freed up when analogue terrestrial TV was switched off—is well suited to wide-area mobile coverage. The higher-frequency 2.6 GHz band provides the capacity necessary for higher data speeds and greater network throughput.
As the new auction approaches, stakeholders and consumers will be watching closely to see whether Ofcom’s steps to ensure fairness and transparency address past concerns and lead to efficient use of these valuable airwaves.
What do you think about Ofcom’s handling of 4G spectrum auctions? Let us know in the comments.