Spectrum trading now available in UK mobile market

UK regulator Ofcom has published its proposals for the introduction of spectrum trading in the UK mobile market. The guidelines allow for trading of all 900MHz, 1800MHz and 2100MHz spectrum. This will be the first time that UK operators have been allowed to transfer their spectrum assets to one another, and Ofcom will act as the administrator for all transactions.

Ofcom Chief Executive, Ed Richards said: “This is an important milestone in the modernisation of spectrum management in the UK. It comes in response to the fast pace of change and innovation taking place in the mobile communications sector, which is placing increased demands on spectrum. One important way of meeting this demand is making the acquisition of spectrum as flexible as possible.”

The move may allow for some equalisation of spectrum holdings within the UK market. Everything Everywhere, the company formed from the merger of T-Mobile and Orange’s UK operations last year holds the majority of the 1800MHz spectrum in the market (although it agreed to divest some spectrum in order to secure go-ahead for the merger). O2 and Vodafone, meanwhile, have exclusivity over 900MHz spectrum.

Earlier this year Ofcom announced that it is to allow re-farming in the UK, meaning that all operators are now free to use their 2G spectrum for 3G services.  For Everything Everywhere, the absence of 900MHz spectrum means it will lack the advantage in rural and indoor 3G coverage that O2 and Vodafone could choose to exploit.

Entire spectrum licences could be traded under the new rules, with all licence obligations included in any transfers.

“Generally, the more flexibility we allow in spectrum trading, the greater the potential benefits to consumers; we create a wider range of potential opportunities for trades to occur that further the efficient and optimal use of the spectrum,” Ofcom said.

Allocation of spectrum in the 800MHz and 2600MHz bands is forthcoming, and this is likely to have an impact on trading activities. Ofcom pointed out that this round of allocation will be the last in the UK mobile market for a decade.