Ofcom revises guidelines for 5G spectrum auction

Ofcom announced revised guidelines to release 5G spectrum through an auction in 2020 in order to enhance mobile broadband in the UK.
Verizon 5G network by EricssonOfcom in December 2018 proposed including coverage obligations in auction rules. These would have required mobile companies to increase coverage in rural areas, in exchange for winning discounted spectrum through the auction.

Four mobile network operators – BT/EE, O2, Three and Vodafone – had discussed coverage issues with the Government and Ofcom an alternative ‘Shared Rural Network’ plan to deliver good quality 4G coverage to at least 92 percent of the UK over six years.

The Government on 25 October announced the companies had each committed to reaching this target. The Government has also confirmed it will provide £500 million of funding for the plan.

Ofcom said it will not be proposing to include coverage obligations in the spectrum auction for 2020. “This is because through the companies working together, the agreement will achieve higher coverage than the requirements we could have set through an auction,” Ofcom said.

Ofcom will also not include maximum discount each of between £300-400 million.

Ofcom will be releasing 80 MHz of spectrum in the 700 MHz band. These airwaves are ideal for providing quality mobile coverage, both indoors and across very wide areas – including the countryside. The 700 MHz band is currently used for digital terrestrial TV and wireless microphones.

Ofcom will be offering six lots of 2×5 MHz (60 MHz in total) in the 700 MHz band with a reserve price in the proposed range of £100m-£240 million per lot.

Ofcom will be offering four lots of 5 MHz (20 MHz in total) of 700 MHz downlink-only spectrum, with a proposed reserve price of £1 million per lot.

Ofcom will be releasing 120 MHz of spectrum in 3.6-3.8 GHz band, the primary band for 5G for carrying lots of data-hungry connections in concentrated areas. The 3.6-3.8 GHz band is used for fixing links and satellite services.

Ofcom will be offering 24 lots of 5 MHz (120 MHz in total) of 3.6-3.8 GHz spectrum, with a reserve price in the proposed range of £15m-£25 million per lot.

Winners of 3.6-3.8 GHz spectrum will have an opportunity within the assignment stage to negotiate their placements within the band among themselves. This will potentially reduce the level of fragmentation in the wider 3.4-3.8 GHz band.

Ofcom is proposing to place a 37 percent cap on the overall spectrum that any one mobile company can hold following the auction.

The 37 percent 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;

O2, a part of Telefonica, will not be restricted by the cap due to its current spectrum holdings, Ofcom said.