Ofcom unveils 2.3GHz, 3.4GHz consultation; BT, EE to be excluded from 2.3GHz auction

21 Nov 2016

UK telecoms regulator Ofcom has issued a consultation relating to its planned auction of spectrum in the 2.3GHz and 3.4GHz bands. A total of 190MHz worth of spectrum will go under the hammer, broken down as: 40MHz in the 2.3GHz band (2350MHz-2390MHz), and 150MHz in the 3.4GHz band (3410MHz-3480MHz, 3500MHz-3580MHz). Given the technical characteristics of the bands in question, Ofcom says it is better suited for adding capacity, and is not an effective means of extending existing levels of mobile coverage. As such, coverage-based stipulations are more likely to come back into play in 2018/19, when the regulator seeks to auction the 700MHz band.

Ofcom reports that of the total amount of mobile spectrum that is currently useable, BT (and its wholly owned subsidiary EE) holds 45%; Vodafone has 28%; O2 holds 15%; and H3G, 12%. Given its dominant holding, BT/EE will be prohibited from participating in the auction for 2.3GHz frequencies. The regulator, however, is less concerned with the planned distribution of the 3.4GHz band, as it is not immediately usable. Ofcom expects that the band may come into play as cellcos approach the 5G era, and ‘specifying limitations on spectrum holdings at this point might constrain an operator’s ability to innovate’. In a related move, Ofcom says that it plans to set the cap on immediately useable spectrum at 255MHz, which represents 42% of such spectrum and is at the level of BT/EE’s current mobile spectrum holdings. This cap will prevent a worsening of the current extent of asymmetry in terms of immediately useable spectrum.

The 2.3GHz spectrum will be made available in England, Scotland and Wales, but not in Northern Ireland, while the 3.4GHz spectrum will be made available throughout the whole of the UK. If UK Broadband chooses to participate in the auction and to apply for a replacement licence, the frequencies making up its current holding will change to enable all users of the 3.4GHz band to have contiguous spectrum holdings.

The consultation is open to submissions until 30 January 2017.