The auction of 2.3GHz and 3.4GHz spectrum will start next week, keeping the UK on track for the commercial launch of 5G networks by 2020.
Ofcom has confirmed the six approved participants will start bidding on Tuesday 20 March, initiating a process that has been tested by market developments such as the failed merger between O2 and Three and legal challenges from EE and Three.
Up for grabs is 40MHz worth of 2.3GHz airwaves, which can be used right away to support existing 4G services, and 150MHz of 3.4GHz of bandwidth that is earmarked for 5G in 2020.
Ofcom 5G auction
All four mobile operators – EE, O2, Three and Vodafone – have been approved, alongside Airspan Spectrum Holdings and Connexin Limited.
Airspan is a small cell operator, while Connexin is a fixed wireless operator, delivering superfast broadband without a physical connection to locations in Hull. The East Yorkshire city isn’t served by BT Openreach or Virgin Media but by KCOM, which has been accused of enjoying a monopoly.
The auction is the first to be subject to Ofcom’s spectrum cap, which was the cause for the aforementioned legal challenges. The regulator intends to limit any one operator to just 255MHz of ‘immediately usable’ spectrum (800MHz, 900MHz, 1400MHz, 1800MHz, 2100MHz and 2.6GHz) and 340MHz of all airwaves available in the UK. This is in effect a cap of 37 per cent.
BT-EE already has 255MHz so would be banned from bidding for the 2.3GHz band, but is free to compete for the 3.4GHz spectrum. Vodafone has 176MHz so would be limited to 85MHz of each, while Three and O2 have no restrictions.
Three wanted this lowered to 30 percent and launched a legal challenge, an act which spurred EE, which had grudgingly accepted the limits, to also challenge the proposals.
Ofcom is planning another sale of spectrum in 2019, this time for the 700MHz airwaves vacated by Digital Terrestrial Television (DTT). This spectrum is valued for its long range, which is why Ofcom is proposing new coverage obligations for any successful bidder.
Future 5G auctions will likely see high range ‘millimetre wave’ (mmWave) spectrum, which offers high capacity, made available to operators.