After a number of delays, the UK’s first auction of 5G spectrum gets underway today, with five bidders hoping to secure a share of the spoils.
EE, O2, Three and Vodafone will all be bidding, alongside small cell operator Airspan. Fixed wireless broadband operator Connexin was also approved as a participant, but it withdrew from the process last week.
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.
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 Airspan, Three and O2 have no restrictions.
The auction comprises two stages. The first will determine how much spectrum has been won by each bidder and the second will determine where in each band this is located. The process could take several weeks.
Ofcom was keen to stress that its role is to maximise the efficiency of the spectrum and its value to society – not to raise revenue. There were some suggestions that the £2.31 raised by the 2013 auction of 4G spectrum was disappointing given that some estimates were as high as £4 billion.
However most industry observers did not want a repeat of the infamous 3G auction in 2000 which generated £22 billion for the treasury and restricted the ability of operators to invest in infrastructure.
“Our job is to release these airwaves quickly and efficiently, and we want to see them in use as soon as possible,” said Philip Marnick, Ofcom’s spectrum group director.
“We are glad the auction is now underway. This spectrum will help improve people’s experience of using mobile broadband today, and also help companies prepare for future 5G services.”