Following reports that the UK’s mobile network operators (MNOs) have submitted binding voluntary commitments to improve 4G coverage through a ‘Shared Rural Network’, local regulator Ofcom has published updated proposals for the auction of frequencies in the 700MHz and 3.6GHz-3.8GHz bands.
In December 2018 Ofcom launched a consultation on auction proposals that included the opportunity for up to two bidders to receive a discount on the cost of the spectrum in return for accepting obligations to improve mobile coverage. Now, as a result of the aforementioned network sharing project announced last week by the MNOs, the regulator has said that it is consulting on revised auction plans which have no coverage obligations, which it suggests ‘reflect this material change in the relevant circumstances’ and could ‘deliver better coverage outcomes for consumers than could have been delivered by [its] proposals’.
As per the auction plans, Ofcom has confirmed that it aims to offer 200MHz of spectrum across the two bands, comprising: 80MHz in the 700MHz band, which it expects to become available for mobile use nationwide by May/June 2020; and 120MHz in the 3.6GHz-3.8GHz band, which should become available for mobile use across the country by June 2020, although some ‘localised constraints may remain in place until the end of 2022’. Meanwhile, as a result of its decision to scrap coverage obligations, the regulator is now proposing to run the auction using a Simultaneous Multiple Round Ascending (SMRA) format, which comprises a principal stage (where companies will bid for spectrum in separate ‘lots’ to determine how much each bidder wins), followed by an assignment stage to determine the specific frequencies winning bidders will be allocated.
Ofcom has invited responses to its consultation by 9 December 2019, ahead of making a final decision, and it has said it hopes to be in a position to start the spectrum auction by Spring 2020. Finally, Ofcom has also confirmed that, to ensure that MNOs stick to the commitments they have now made for improving coverage, it will write conditions into their respective spectrum licences, with these to be published ‘in due course’. Further, the regulator has said it will set out the criteria and methodology for assessing and, as necessary, enforcing compliance with these commitments.