UK delays mmWave spectrum sale due to Vodafone/Three merger

Ofcom has firmed up its plans to sell off mmWave spectrum for mobile services, but will hold off until it has made a call on the proposed merger between Vodafone and Three UK.

It’s anyone’s guess exactly how long the Competition and Markets Authority (CMA) will take to decide on the potential impact of the Vodafone/Three tie-up, announced in June. No one’s expecting an uncharacteristically quick decision there; at present we’re looking at about another year. That said, given the time Ofcom has taken cogitating on its options for mmWave to date, the competition body’s speed – or lack thereof – can hardly be seen as an obstacle to the allocation of the airwaves.

Almost a year after it began a consultation into the matter, Ofcom in March announced that it would make 6 GHz of frequencies in the 26 GHz and 40 GHz bands available for mobile, including 5G. It outlined plans to auction off citywide licences, while awarding highly localised licences on a first come, first served basis under the shared access licensing framework. And put that idea out to consultation.

Having mulled further, the regulator has now announced that it will go ahead with that plan. It will award 15-year, citywide licences in both bands in 68 major towns and cities across the UK by auction. It will also assign much more localised licences – within those same cities and elsewhere in the UK where deployments are likely to be sparser – to those who are quickest to request them.

It will make the 26 GHz shared access licences available early next year, it said. But, “to avoid the risk of an inefficient allocation of spectrum,” the auction will have to wait until the CMA rules on Vodafone/Three. That makes sense.

Ofcom said it will publish a statement and further consultation – yup, another one – on the design of the auction later this year. That does not mean a CMA ruling is imminent though. Ofcom expects the watchdog to decide on the merger in September 2024, although these things often take longer than planned, so we’ll take that date with a pinch of salt at this stage.

While Ofcom has made it clear that the auction process will begin in the final quarter of calendar 2024 at the earliest, realistically it will likely be 2025 before the UK sees a mmWave spectrum auction.

Well, that’s not strictly true. Some of the UK’s major mobile operators are already using the 40 GHz band, having won the spectrum at auction in 2008. Three holds frequencies in its own right as well as via its MBNL joint venture with EE, as does managed networks specialist MLL. Those licences can only be used for fixed services though. The bulk of those licences will be revoked in June 2028.

As far as 26 GHz is concerned, we have seen some auctions across Europe of late, but we’re not talking big money proceeds for state coffers. Spain raised €36 million in its 26 GHz auction late last year, for example.

So while this is an interesting time with regard to spectrum allocation in the UK, we’re not expecting major headlines or too much hype. And we’re not expecting anything to happen particularly quickly.

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