UK comms regulator Ofcom has announced the outcome of the principal stage of its auction to release more airwaves to improve mobile services and support 5G. A total of 200 MHz of spectrum was available to bid for in the auction, split across two bands:
Four companies – EE Limited, Hutchison 3G UK Limited, Telefónica UK Limited and Vodafone Limited – took part in the principal stage of the auction, which involved them bidding for airwaves in 34 ‘lots’ to determine how much of the available spectrum they each secured. Principal stage bidding has now ended and Ofcom has published the results.
Results of the principal stage
The total revenue raised from the principal stage is £1,356,400,000 (€1.138bn) with all money to be paid to HM Treasury.
The auction will now move to the ‘assignment’ stage. This process involves a single bidding round in which the companies can bid for the frequency positions they prefer for the airwaves they have secured in the principal stage.
After submitting their assignment stage bids in the 3.6-3.8 GHz band, bidders will then have the opportunity to negotiate the frequency positions among themselves – if they want to join together the airwaves they have secured with spectrum they already hold in the wider 3.4-3.8 GHz band. This will be subject to whether the companies wish to enter the negotiation period. If they do, we will publish the dates for the negotiation period.
The final results of the auction – including the total amounts paid, the specific frequencies secured for each bidder, and the outcome of any agreements reached in the negotiation period – will be published once all stages are complete.
“With bidding in the principal stage concluded, we now move to the next stage of the auction where the operators will have an opportunity to negotiate the position of their spectrum holdings in the wider band,” advised Philip Marnick, Group Director, Spectrum at Ofcom. “This is an important step forward in bringing better mobile services to people – wherever they live, work and travel. These airwaves will help improve coverage for the mobile services people use today, as well as supporting the UK’s position as a world leader in 5G.”
According to Paolo Pescatore, TMT analyst at PP Foresight, this was one of relatively easiest spectrum auctions. “The main process concluded so quickly as all providers were successful in securing the spectrum they needed. Expect to see some haggling behind closed doors in the next assignment stage. Fingers crossed this new spectrum can be used by the summer,” he adds.
“However, Vodafone remains the only operator not to secure any 700 MHz spectrum as it will refarm 900 MHz for 5G services,” he notes, suggesting that all of the operators are seeking to maximise their current holdings in the face of increasing costs and margins being squeezed.
“It is highly unlikely that we will see a change in approach to 5G deployment. To date, focus has been on cities and data-hungry locations for the rollout of 5G. This will continue especially with those winning securing 700 MHz, which will be used for indoor coverage as well in the short term. Ultimately the operators will seek to leverage 700 MHz in rural areas in the future, but not immediately,” he concludes.