Airwaves available for mobile will increase by nearly 20%
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, it 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%). Following consultation, it 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 700MHz band
Ofcom is releasing 80MHz of spectrum in the 700MHz 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 3.6GHz to 3.8GHz band
Ofcom is releasing 120MHz of spectrum in 3.6 GHz to 3.8GHz band, commonly used for fixed links and satellite services. 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.
The spectrum would be made available for bids in the following lots: six lots of 2x5MHz (60 MHz in total) in the 700 MHz band with a reserve price of £100 million per lot; four lots of 5MHz (20MHz in total) of 700MHz downlink-only spectrum, with a reserve price of £1 million per lot; 24 lots of 5MHz (120MHz in total) of 3.6 GHz to 3.8GHz spectrum, with a reserve price of £20 million per lot.
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 is imposing a 37% cap on the overall spectrum that any one mobile company can hold following the auction.
This 37% cap on overall spectrum holdings has the effect of restricting existing mobile companies to acquiring the following amounts: BT/EE – 120 MHz; H3G – 185 MHz; Vodafone – 190 MHz; due to its current spectrum holdings, O2 will not be restricted by the cap.
Similar to the 2018 spectrum auction, this year’s auction will involve two stages. In the principal stage, companies first bid for airwaves in separate ‘lots’ to determine how much spectrum each company wins. In the 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 GHz to 3.8GHz spectrum to negotiate their placements within the band among themselves.
On 9 March, 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% 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 its own powers, and so it will not include coverage obligations in its 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.
Philip Marnick, spectrum group director at Ofcom, said: “Demand for getting online, on the move is soaring, with mobile customers using nearly 40% more data year on year. 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.”