UK telecommunications regulator Ofcom published its plans for auctioning new spectrum today (26 October 2015) in the 2.3 GHz and 3.4 GHz bands. The spectrum released by the UK Ministry of Defence is likely to be used for mobile broadband services. Ofcom has set reserve prices totalling £70m for the spectrum.
Ofcom plans to auction the spectrum in early 2016 for the spectrum. A total of 190 MHz of spectrum is being made available in two bands, which the regulator said are particularly suited for high-speed mobile broadband services, because they can carry large amounts of data. This is equivalent to around three-quarters of the spectrum released by Ofcom through the 4G auction of 800 MHz and 2.6 GHz frequencies in 2013.
There will not be a cap on the amounts bidders can buy. Ofcom said it believes that any cap could prevent a bidder from buying large blocks of adjacent spectrum. Large blocks have the potential to support very fast download speeds, meaning even faster mobile broadband for consumers, which helps pave the way for 5G.
Ofcom will proceed with reserve prices of £1 million per 1 MHz in the 2.3 GHz band and £200,000 per 1 MHz in the 3.4 GHz band; that is £10 million per 10 MHz lot in the 2.3 GHz band and £1 million per 5 MHz lot in the 3.4GHz band.
Being higher up the frequency band, the spectrum travels shorter distances and is less able to penetrate buildings than sub-1 GHz spectrum, and therefore fetches lower prices. Operators are likely to use the spectrum to boost existing 4G services by providing wider channels to increase data throughput through carrier aggregation technology, or for shorter range transmission in areas of high bandwidth demand.
Ofcom said ‘the auction is designed to be fair and transparent, enabling the spectrum to be awarded to those who can put it to the most efficient use in the best interests of consumers’. Ofcom proposes to auction the spectrum in lots of 10 MHz for the 2.3 GHz band and 5 MHz for the 3.4 GHz band.
Many existing mobile handsets from major manufacturers, including the Apple iPhone 6, HTC Desire and Samsung Galaxy, are already compatible with the 2.3 GHz spectrum (although they will not necessarily work in all countries).
The 2.3 GHz band is so far being used for high-speed 4G mobile broadband networks in ten countries outside Europe: Australia, China, India, Norway, Oman, Russia, Saudi Arabia, South Africa, South Korea and Sri Lanka.
The 3.4 GHz band is currently being used for 4G wireless broadband in six countries including the UK, Canada and Spain. In Europe there have been authorisations in Estonia, Germany, Ireland, Italy, Latvia, Macedonia, Norway, Portugal, Spain, Sweden, Switzerland, and the UK.
In the UK, UK Broadband, a subsidiary of Hong Kong telecoms firm PCCW (which owns Hong Kong Telecom), currently holds 2 x 20 MHz blocks of 3.4 GHz spectrum, which it uses for its 'Relish' mobile broadband service in London with other networks elsewhere in the UK.
Philip Marnick, Ofcom Spectrum Group Director, said: “Spectrum is the essential resource which fuels the UK’s wireless economy. This auction is an important step in ensuring that the UK has the wireless capability to deliver and support new technology.
“We’re responding to rapid change and innovation in the communications sector, which is placing greater demands on spectrum. Part of our plan to meet this demand is by making new spectrum available and allowing it to be used in a number of different ways.”