UK regulator Ofcom announced plans to auction-off spectrum suitable for LTE early next year. It said that the 250MHz of new spectrum on offer – in the 800MHz (digital dividend) and 2.6GHz frequency bands – is equivalent to three quarters of the mobile spectrum in use in the UK today, and 80 percent more than the UK 3G auctions that took place in 2000.
“The combination of low and high frequency spectrum available... creates the potential for next generation mobile broadband services to be widely available across the UK, while at the same time having the capacity to cope with significant demand, even in urban centres,” the regulator said in a statement.
However, Ofcom faces problems due to the uneven way spectrum has been allocated in the past. For example, market-leader Everything Everywhere (formed by the merger of Orange UK and T-Mobile UK) holds no valuable spectrum under 1GHz, while rivals O2 and Vodafone are currently re-farming existing 900MHz for mobile broadband use. The UK’s 3G auctions a decade ago raised a colossal £22.5 billion for the government but the 4G frequencies are expected to raise just a fraction of that.
Ofcom has put a number of safeguards in place to ensure that none of the UK’s four national operators use the auctions to gain an unfair competitive advantage.
“The least restrictive way to ensure at least four national competitors is through the use of spectrum floors in the auction,” it said. “This involves disregarding any auction outcomes in which four companies do not win the minimum amount of spectrum necessary to provide higher quality data services.
This can involve different combinations of spectrum, each of which could be sufficient to ensure a credible competitor.” These conditions are also seen as a way of ensuring the survival of 3 UK, the country’s smallest operator, which would otherwise struggle to compete with its much larger rivals in the auction process.
