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Ofcom announces 700 MHz and 3.6-3.8 GHz auction with no coverage obligations

UK telecoms regulator Ofcom has announced that the next tranche of 5G frequencies will be made available to operators via an auction next year.

The spectrum consists of 80 MHz of 700 MHz band and 120 MHz in 3.6-3.8 GHz band. The 700 MHz is a lot more valuable to operators because it covers much greater distances than the higher frequency spectrum. Thus Ofcom is proposing a reserve price of up to £240 million per 2×5 MHz lot of that, compared to a reserve price of up to £25 million for each 5 MHz lot of 3.6-3.8 GHz spectrum. Four lots of 5 MHz of 700 MHz spectrum will also be auctioned for downlink-only.

The big news within the announcement is that Ofcom isn’t attaching any coverage obligations to any of the spectrum, apparently as a result of the deal struck with operators last week. Were it not for that the 700 MHz spectrum was expected to only be offered on the condition that whoever owned any of it committed to the kinds of arbitrary geographical coverage obligations that have become do politicised in recent years.

“We’re pressing ahead with plans to release vital airwaves to improve mobile services for customers,” said Philip Marnick, Spectrum Group Director at Ofcom. “Together with mobile companies’ commitments to improve coverage, this will help more areas get better services, and help the UK maintain its place as a leader in 5G.”

The mechanics of the auction will be similar to the 2018 one, which brought in an acceptable amount of cash for the government so it presumably felt no need to change it. The 37% cap on spectrum ownership still applies, which means EE can only win a maximum of 120 MHz, Three 185, and Vodafone 190. O2 has so little spectrum that it could buy the lot if it felt like it (see below). The auction will take place sometime next Spring.

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6 comments

  1. Avatar Donald Duck 28/10/2019 @ 3:57 pm

    there are no 5G use cases yet

    operators don’t know what to use it for, but are being forced by equipment manufacturers to deploy it now, probably 2-5 years too early, because others are also going to do it

    the governments never say no to extra money… but are clever enough to notice that if they put coverage obligations they wont get the amounts they´d expect

    so, no coverage obligations.

    which means:
    equipment people win
    government people don’t loose
    operators people don’t win
    regular people don’t win

    not quite the cool scenario marketing people are selling, i´d say

    • Avatar Jemima Puddleduck 29/10/2019 @ 2:06 pm

      Donald Duck, you are absolutely on the money.

      The push from manufacturers isn’t even being met by an appetite to deploy on any real scale from the MNO’s. Real business cases to sustain 5G haven’t been built yet because, as you say, the use cases aren’t there.

      5G has so much potential but, sadly, it is an adventure in obfuscation for the time being. Perhaps the geopolitical driver, to seize he high ground even when it’s not clear what it’s for yet, is what’s actually pushing 5G.

  2. Avatar Paul Jackson 29/10/2019 @ 6:12 am

    Unless there is collusion between equipment vendors (e.g. to cease support for 4G) – and thus a cartel, which surely would draw “attention” of Competition and Markets Authority – how can equipment vendors *force* operators to deploy 5G if operators don’t want to?
    Meanwhile, there seems to be increasing public awareness and concern about health effects of 5G, especially for higher frequencies never deployed for 1G-4G.

  3. Avatar Fawad Niazi 29/10/2019 @ 9:14 am

    No coverage obligations for existing operators is a sensible move…competition will do it itself else most of countries have Universal Service Fund or alike arrangements

  4. Scott Bicheno Scott Bicheno 29/10/2019 @ 2:08 pm

    Loving the foul pseudonyms.

  5. Avatar Tim 30/10/2019 @ 10:25 am

    Still waiting for good 4G coverage…

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