Ofcom guarantees LTE spectrum for fourth operator

UK regulator Ofcom has unveiled plans for the country’s 4G spectrum auction. The UK has lagged other leading markets and Ofcom has revealed that spectrum will be allocated in 2013.

Ofcom has set aside spectrum intended to guarantee the presence of four LTE operators in the UK market, insisting that UK consumers would benefit from better services and lower prices if there continues to be “at least four credible wholesale operators of mobile services”.

The fourth operator is likely to be 3UK, although Ofcom said it would guarantee the spectrum to any operator prepared to meet the reserve price should 3 not be interested.

The auction will offer spectrum in the 800MHz, 1800MHz and 2.6GHz bands and Ofcom said that competition would suffer if neither 3UK nor a new entrant is able to acquire at least a minimum amount of spectrum in the auction.

Limits will be imposed on the amount of spectrum each operator can acquire in order to ensure that no operator has substantially more spectrum than the others.

UK operators will be able to bid for 4G spectrum in early 2013. They are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and begin offering 4G services to consumers later that year. Ofcom insists that this is the same timeline that it has set out in the past and said that it is still on course for meeting that target.

The lower frequency 800 MHz band is part of the ‘digital dividend’, which is ideal for widespread mobile coverage. The higher frequency 2.6 GHz band is more suited to delivering higher capacity, but lacks in-building penetration. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.

Everything Everywhere has been campaigning for approval to refarm its existing 1800MHz spectrum in order to launch LTE services ahead of the auction. Ofcom said that this is a separate matter and no decision on Everything Everywhere’s plans has been made yet.

“Europe’s telecoms markets are already dividing into two camps of 4G “haves” and “have-nots” and the UK lies firmly stuck in the latter,” said Thomas Wehmeier, principal analyst for telco strategy at Informa Telecoms & Media. “The auction proposal set out today by Ofcom means that the UK will not see 4G LTE services go live until later in 2013 at the earliest, putting UK mobile consumers almost four years behind the world’s leading 4G markets.”

Meanwhile, Simon Collins, Vice President at Praesidium, the business consulting division of WeDo Technologies, blamed gamesmanship by the UK’s operators for stalling the auction process.

“I think it’s sad that it’s the play-off between the network operators in the UK that has delayed LTE being implemented,” he said. He added that Ofcom should have released certain spectrum to enable more operators to pilot LTE networks.

“There are always radio spectrum issues that you hear from regulators in other markets, but at the end of the day, if the network operators are at least given some release of spectrum they could at least start pilots because at the moment there are none, and in other markets operators have been able to pilot LTE services much earlier.”

However, Wehmeier added that being late to market with 4G is not necessarily all bad news.

“UK mobile operators and consumers alike will benefit from the fact that 4G in late 2013 will be a more mature technology, providing major benefits in the shape of a more stable technology, a greater range of devices and significantly lower equipment costs due to increasing economies of scale,” he said.

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