Ofcom launches consultation on 2.3GHz/3.5GHz spectrum auction plans

27 May 2015

UK telecoms regulator Ofcom has published an update on plans to release spectrum which it says could be used to meet the growing demand for mobile broadband services, claiming that the decisions it has announced will help it ‘set the groundwork for the spectrum award, including how these frequencies will be licenced and the mechanics of the auction’.

The document itself sets out Ofcom’s decisions on a number of issues connected with the award of frequencies in the 2.3GHz and 3.4GHz bands, including: the auction design and process; the coexistence of new and existing uses of the frequencies to be awarded; and the licence conditions to be attached to the spectrum. While no specific uses for this spectrum have yet been prescribed, the regulator notes that it is likely to interest the mobile industry, saying that both the aforementioned bands will be released for civil use and ‘could be suitable for providing very high data capacity’.

Meanwhile, Ofcom is also seeking stakeholder views on options for proceeding with the spectrum award in light of anticipated changes to the make-up of the British mobile market. In a press release the watchdog noted that since its last consultation on the proposed spectrum sale, fixed line incumbent BT had announced plans to acquire EE, the country’s largest cellco by subscribers, while Hong Kong-based Hutchison Whampoa, owner of Three UK, had reached an agreement to buy O2 UK from Spain’s Telefonica. Ofcom notes that it the latter merger proceeds then it would reduce the UK wholesale mobile market from four major operators to three.

Ultimately, Ofcom has 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’. To that end, would-be bidders for spectrum have been invited to comment on a proposed option under which the regulator would award most of the newly available spectrum later this year, or early in 2016, with the remaining frequencies held back for award at a later date. According to Ofcom, such an approach could be preferable to the alternatives of either awarding all of the spectrum, or delaying the award – although it noted that both those options remain open. As per the latest announced decisions, meanwhile, licences for the 2.3GHz and 3.4 GHz frequency bands would be issued for an indefinite period, but with an initial term of 20 years after which licence fees may be payable. Moreover, there will be no coverage obligations placed on this spectrum, with Ofcom saying this is because the frequencies in question are better suited for high capacity and faster speeds, rather than achieving wide geographical coverage.

With the closing date for the consultation set as 26 June 2015, a decision regarding the best approach for making the spectrum available is expected later this year, following stakeholder responses.

United Kingdom, Ofcom