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Ofcom announces 700 MHz and 3.6-3.8 GHz auction rules

A new batch of mobile spectrum that will increase the total by 18% will be made available for auction as some unspecified date.

Specifically we’re talking 80 MHz of the precious, low-frequency 700 MHz band and 120 MHz of spectrum in the less useful 3.6-3.8 GHz band. The 700 MHz stuff is especially handy for improving coverage thanks to its long range, which the higher frequency spectrum is being used for 5G capacity as there’s plenty of it.

The mechanics are similar to the 2018 auction in so much as they involve a principal stage in which lots of spectrum are bid for, followed by an assignment stage that determines the specific frequencies. The latter stage is important for combining old and new spectrum holdings into contiguous chunks, which are more useful to operators.

“Demand for getting online, on the move is soaring, with mobile customers using nearly 40% more data year on year,” said Philip Marnick, Spectrum Group Director at Ofcom. “So releasing these airwaves will bring a much-needed capacity boost – helping mobile customers get a better service. We’re also releasing more airwaves to help cement the UK’s place as a world leader in 5G.”

Here are the details, as explained by Ofcom:

  1. The spectrum would be made available for bids in the following lots:
    – Six lots of 2×5 MHz (60 MHz in total) in the 700 MHz band with a reserve price of £100m per lot.
    – Four lots of 5 MHz (20 MHz in total) of 700 MHz downlink-only spectrum, with a reserve price of £1m per lot.
    – 24 lots of 5 MHz (120 MHz in total) of 3.6-3.8 GHz spectrum, with a reserve price of £20m per lot.
    – As we are not planning to include coverage obligations anymore, the two spectrum lots that carried a proposed maximum discount each of between £300-400m will no longer apply.
    2. We are using an auction format known as ‘simultaneous multiple round ascending’ (SMRA).
    3. The 37% cap on overall spectrum holdings has the effect of restricting existing mobile companies to acquiring the following amounts:
    – BT/EE – 120 MHz BT/EE;
    – H3G – 185 MHz;
    – Vodafone – 190 MHz;
    – Due to its current spectrum holdings, O2 will not be restricted by the cap.
    4. The 700 MHz band has previously been used for digital terrestrial TV and wireless microphones. The 3.6-3.8 GHz band is used for fixed links and satellite services.
    5. In December 2018 we proposed including coverage obligations in our auction rules. These would have required up to two mobile companies to increase coverage in rural areas, in exchange for winning discounted spectrum through the auction. The mobile network operators developed the Shared Rural Network plan in response to Ofcom’s proposals, and it is therefore no longer appropriate to include coverage obligations in the auction.
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