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Ofcom confirms 5G auction rules

March 13, 2020

By Colin Mann

UK comms regulator Ofcom has confirmed how it will release important airwaves to help improve mobile broadband and support the rollout of 5G.

To help improve mobile services and give more people access to 5G networks, Ofcom will release more mobile airwaves through an auction. This will increase the total amount of airwaves available for mobile in the UK by nearly a fifth (18 per cent). Following consultation, Ofcom has now confirmed the rules for how the auction will work.

The auction will involve companies bidding for spectrum in two different frequency bands:

  • The 700 MHz band. Ofcom is releasing 80 MHz of spectrum in the 700 MHz band, following a four-year programme to clear the band of its existing uses for digital terrestrial TV and wireless microphones. These airwaves are ideal for providing good-quality mobile coverage, both indoors and across very wide areas – including the countryside. Releasing these airwaves will also boost the capacity of today’s mobile networks – offering customers a more reliable service.
  • The 3.6-3.8 GHz band. Ofcom is releasing 120 MHz of spectrum in 3.6-3.8 GHz band. These important airwaves are part of the primary band for 5G and capable of carrying lots of data-hungry connections in concentrated areas. All four of the biggest mobile companies have launched 5G in the last year and releasing these airwaves will help increase the capacity and quality of mobile data services.

Similar to Ofcom’s 2018 spectrum auction, this year’s auction will involve two stages. It will work like this:

  • Principal stage. Companies first bid for airwaves in separate ‘lots’ to determine how much spectrum each company wins.
  • Assignment stage. There is then a round of bidding to determine the specific frequencies that winning bidders will be allocated.

To give mobile operators the opportunity to create more continuous ‘blocks’ of 5G-ready spectrum, the assignment stage allows winners of 3.6-3.8 GHz spectrum to negotiate their placements within the band among themselves.

Ofcom has a duty to ensure spectrum is used efficiently. It also ensures companies can compete fairly and that customers have a strong choice of mobile networks. To help maintain strong competition in the UK mobile market, it will impose a 37 per cent cap on the overall spectrum that any one mobile company can hold following the auction.

On March 9th, the Government announced it had reached agreement with the four mobile network operators – BT/EE, O2, Three and Vodafone – to set up a Shared Rural Network to improve mobile coverage across the UK. This involves each company committing to deliver good-quality 4G coverage to at least 90 per cent of the UK over six years.

By mobile companies working together, supported by Government funding, the agreement will achieve higher coverage than Ofcom could have required under Ofcom’s powers, and so the regulator will not include coverage obligations in Ofcom’s auction.

The four mobile network operators have agreed for Ofcom to vary their spectrum licences to give effect to the coverage commitments. It will also monitor, and report, on their progress in meeting the new commitments.

“Demand for getting online, on the move is soaring, with mobile customers using nearly 40 per cent more data year on year,” noted 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.”

Alongside Ofcom’s decisions on how the auction will work, it has finalised the Auction Regulations. Once the regulations have been made and come into force, Ofcom will invite applications from potential bidders for the auction. It will assess all applications, before publishing details of who has qualified to take part and when the principal stage will begin.

A spokesperson for O2 said: “A successful 5G auction will be the catalyst for productivity gains, increases in innovation and could enable the UK to develop a secure and competitive edge in a post Brexit world. Ofcom’s failure to include adequate measures to provide for spectrum defragmentation in the 3.4 GHz – 3.8 GHz band derails the government’s 5G ambitions, undermines their plans to encourage diversification of the 5G supply chain and puts at risk the UK’s competitive position as a leading digital economy.”

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