Ofcom proposes 2.3 and 3.4GHz spectrum auction by end of year

The auction proposals out for consultation are designed to promote efficient use of spectrum; the high-capacity spectrum could be used to deliver further mobile broadband services

Ofcom proposes 2.3 and 3.4GHz spectrum auction by end of year

Ofcom has today (26 May 2015) published an update on plans to release new 2.3GHz and 3.4GHz spectrum, which could be used to meet the growing demand for mobile 4G broadband services.

The UK telecommunications regulator said the plans will help it set the groundwork for the spectrum award, including how these frequencies will be licensed and the mechanics of the auction. Potential bidders are also being asked for their views on how to best proceed with the auction.

The 2.3GHz and 3.4GHz spectrum bands are currently used by the Ministry of Defence and are being made available as part of a wider Government initiative to free up public sector spectrum for civil uses. They bands are deemed to be suitable for providing very high data capacity.

While no specific uses for this spectrum have been prescribed, Ofcom believes it is likely to interest the mobile industry, which relies on spectrum to offer internet services to consumers’ smartphones and tablets.

Since Ofcom’s last consultation on the auction, BT has announced plans to buy EE, while Hutchison Whampoa - the owner of Three - has reached agreement to acquire O2 from its current owner Telefonica. If the latter merger goes ahead it would reduce the UK wholesale mobile market from four major operators to three.

Ofcom noted that it is not its role to decide whether these mergers should go ahead. This rests with the relevant competition authorities. However, Ofcom said it has a duty to secure the optimum use of spectrum.

Flexible approach
Ofcom said its objective is to award the frequencies in a way that will allow consumers to enjoy greater access to high-capacity mobile internet without undue delay.

Today’s consultation invites potential bidders to comment on an option where Ofcom would award most of the newly available spectrum later this year, or early in 2016. The remaining frequencies would be held back for award at a later date.

This approach may be preferable to the alternatives of either awarding all of the spectrum, or delaying the award - although both those options remain open. Ofcom will determine later in the year the best approach to making the spectrum available, following stakeholder responses and the condition of the market.

Licensing decisions
Under the decisions announced today, Ofcom would issue licences for the 2.3 and 3.4GHz bands for an indefinite period, but with an initial term of 20 years after which licence fees may be payable.

There will be no coverage obligations placed on this spectrum. This is because the frequencies being auctioned are better suited for high capacity and faster speeds, rather than achieving wide geographical coverage.

The closing date for this consultation is 26 June 2015.

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