Ofcom’s ideas on radio spectrum allocations look set to infuriate 3G operators

24 Nov 2004

The UK’s telecoms watchdog Ofcom has announced plans to allow greater flexibility in the use of radio spectrum in a bid to stimulate the development of broadband wireless services for consumers and business users. But the move could trigger an angry response from the country’s 3G operators as part of the regulator’s ‘Strategic Review of Spectrum Management’ calls for the auctioning off of additional UMTS spectrum on the open market – a situation which could herald the introduction of fresh competition to the sector, or alternatively, raise the prospect of other companies gobbling up the frequencies to roll out new high speed broadband services. Although the UK’s 3G licensees collectively paid more than GBP22.5 billion for UMTS licences four years ago, Ofcom is now proposing to sell off the so-called ‘3G expansion band’ – a set of frequencies set aside under EU guidelines to guarantee Europe-wide roaming on high speed networks – as part of its new wider liberalisation of radio spectrum. However, the sale of spectrum to a newcomer would be vigorously opposed by the five existing network operators O2, Vodafone, 3, T-Mobile and Orange, which have poured billions into rolling out their new networks.

Ofcom is keen to relax the regulations on spectrum allocation in order to encourage operators the innovation of new products such as personal broadcast services from handsets or the delivery of TV broadcasts direct to a mobile phone. It proposes a shift away from the current regulation of 95% of all frequencies, to a scenario where 70% of them are governed by market forces by 2010, and an increase to the amount of licence-exempt spectrum from 600MHz to 800MHz to allow individuals to access 100Mbps short-range wireless services for high definition TV, web browsing or online gaming services. Licence holders will also be allowed to trade spectrum to boost their own bandwidth capacity for use by new technologies In addition, the industry watchdog says it is thinking about licensing ultra-wideband (UWB) technology, a low-power system that enables high speed wireless connections betweens devices such as PCs, hi-fi units and TV set-top boxes. Ofcom CEO Stephen Carter believes that a ‘market-led approach to spectrum management will reward innovation and extract the maximum value for customers’.

In a possible fillip to the UK’s 3G operators, however, the regulator says it is considering relaxing rules governing network rollout targets in the face of considerable delays to the technology. UMTS licensees want Ofcom to drop its demand that 3G networks must cover 80% of the population by 2007 in favour of a more market-driven approach to providing services such as video calling and music downloads. The regulator plans to publish its thoughts on 3G spectrum and coverage in a consultation document next month.

United Kingdom