Ofcom outlines rules for upcoming spectrum auction

11 Jul 2017

British telecoms regulator Ofcom has unveiled the terms and conditions that will apply to its upcoming auction of spectrum in the 2.3GHz and 3.4GHz bands, which it says are designed to ‘reflect recent market developments and safeguard competition over the coming years’.

As per the plans, the industry watchdog will impose two different restrictions on bidders, which will limit the amount of spectrum that can be won in the 2.3GHz band, while also placing an overall cap on the total frequencies that any single company can lay claim to across the 2.3GHz and 3.4GHz bands in aggregate. In line with this, Ofcom has confirmed that there will be a cap of 255MHz on the ‘immediately useable’ spectrum that any one operator can hold following the auction; this cap, the regulator noted, means that BT/EE will not be able to bid for spectrum in the 2.3GHz band. In addition, Ofcom will implement a cap of 340MHz on the overall amount of mobile spectrum a single operator can hold once the sale process concludes. As a result of the watchdog’s stipulation, it has been noted that BT/EE will only be able to win a maximum of 85MHz in the 3.4GHz band, while Vodafone UK will be pegged to a total of 160MHz across both 3.4GHz bands; based on the current spectrum holdings, however, there will be no restriction on the amount of spectrum any other bidder could win.

In publishing its auction rules, Ofcom said it had considered several important market developments that had taken place since it initially consulted on its plans in November 2016. Included among those were: changes in the availability of additional 5G spectrum, with Ofcom no longer confident that frequencies in the 3.6GHz-3.8GHz band will be available around the same as 3.4GHz spectrum; the fact that Three UK now holds more spectrum following its acquisition of UK Broadband earlier this year; and the fact that both Three UK and Vodafone UK have extra spectrum in the 1400MHz band that is expected to become available in the near-term.