Ofcom plans spring 2020 '5G' spectrum auction

Out-Law News | 31 Oct 2019 | 9:58 am | 1 min. read

Spectrum currently used to receive satellite transmissions from space and by broadcasters and the entertainment industry is to be auctioned off in spring 2020 to support growth in '5G' services, the UK's telecoms regulator has confirmed.

Ofcom has published revised proposals on the design of its auction, which will involve the sale of 200 MHz of spectrum in total spread across two frequency bands, in addition to proposals to create auction regulations.

The regulator previously set out its plans to reallocate spectrum sitting within the 700 MHz and 3.6 GHz to 3.8 GHz bands for mobile data services in light of the "growing consumer demand for mobile data services" and so as to support "innovative 5G services".

Ofcom subsequently outlined plans to offer discounts on the cost of spectrum to up to two bidders in the auction if they accepted obligations to improve mobile coverage. However, the regulator has now said it has dropped its plans to tie mobile coverage commitments to the auction process after the four main UK mobile network operators, EE, O2, Three and Vodafone, came forward with voluntary proposals to address rural 'not spots' through a 'shared rural network'. Ofcom said, however, that it will write the commitments the four operators make in the finalised shared rural network deal into their spectrum licences.

Under Ofcom's revised plans, the spectrum being auctioned off will be split into 34 separate lots that businesses can bid to win the rights to use.

Of the 200 MHz of spectrum being made available, 80 MHz is within the 700 MHz band and 120 MHz within the 3.6-3.8 GHz band.

Ofcom has proposed to place reserve prices on each of the lots. The reserve prices vary depending on what block of spectrum is being sold, but the largest reserve price Ofcom has proposed for a single lot could total £240 million.

None of the four main UK mobile network operators are permitted to hold more than 37% of the overall spectrum available to them on the market, and so Ofcom has said EE, Three and Vodafone will each be limited in the volume of spectrum they are able to win in the forthcoming auction. No such restrictions apply to O2.

"Ofcom’s forthcoming spectrum release promises to boost the roll-out of 5G services in the UK," said telecoms expert Nick Hutton of Pinsent Masons, the law firm behind Out-Law. "5G technology is expected to underpin a host of exciting new applications, from consumer-facing services like augmented and virtual reality, to massive ‘machine-to-machine’ connectivity. Coupled with the government’s investment programme in trials of innovative 5G use-cases, the UK is well-placed to stake a claim as an international ‘first mover’ in 5G."