Ofcom, the UK communications regulator, announced today (7 November 2014) that it has taken a further step towards releasing valuable new spectrum that could be used to meet the growing demand for mobile broadband services.
Potential bidders are being invited to comment on proposals for Ofcom’s auction of spectrum in the 2.3GHz and 3.4GHz bands, which is expected to take place in late 2015 or early 2016.
While no specific uses for this spectrum have been prescribed, it is likely to interest the mobile industry, which relies on spectrum to offer internet services to consumers’ smartphones and tablets. The 2.3GHz and 3.4GHz spectrum bands are frequencies which could be suitable for providing very high data capacity, Ofcom believes.
Many existing mobile handsets from major manufacturers including the Apple iPhone 5 and 6, HTC Desire and Samsung Galaxy are already compatible with the 2.3GHz spectrum in other markets. The band is so far being used for high-speed 4G mobile broadband networks in 10 countries outside Europe, including China, India and Australia.
The 3.4GHz band is currently being used for 4G wireless broadband in six countries including the UK, Canada and Spain. In the UK, 3.4GHz spectrum is currently being used by UK Broadband for its ‘Relish’ mobile broadband service in London.
Under today’s proposals, Ofcom intends to hold an auction for a total of 190MHz of spectrum in the two bands – equivalent to around three-quarters of the airwaves released by Ofcom through the 4G auction in 2013.
The spectrum is currently used by the Ministry of Defence, and is being made available as part of a wider Government initiative to free up public sector spectrum for civil uses.
The auction is 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. Ofcom proposes to auction the spectrum in 38 lots of 5MHz, and bidders can request a minimum bid of four lots per band.
To promote competition, Ofcom has proposed a safeguard cap, limiting operators’ mobile spectrum holdings to 37% of relevant spectrum. This overall spectrum cap would include the newly-auctioned spectrum.
Ofcom is proposing a reserve price of between £2.5m to £5m per lot for the 2.3GHz spectrum, and £1m for the 3.4GHz spectrum. The total value of the proposed reserve prices would be between £50 and £70m.
Demand for mobile data services is expected to rise considerably in the coming years. To address this, more spectrum is needed, together with other solutions, such as new technologies. Ofcom is already taking steps to enable the UK to meet the growing demands placed on its wireless infrastructure.
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 consultation closes on 23 January 2015.