Ofcom may award frequencies in the 2.3 GHz and 3.4 GHz bands in two stages rather than via a single auction process to accommodate potential changes to the UK mobile market.
The UK Ministry of Defence (MOD) is releasing the 2.3 and 3.4 GHz bands as part of government plans to make 500 MHz of spectrum available for civil use by 2020. The spectrum is likely to be of interest to mobile broadband operators, Ofcom said.
The regulator has opened a consultation on its proposal to award most of the newly available spectrum later this year or early in 2016, and hold back remaining frequencies for award at a later date. The closing date for this consultation is June 26.
This option is being considered to take into account potential changes on the market, such as BT's planned acquisition of EE and the proposed merger of O2 UK with Three UK.
"This approach may be preferable to the alternatives of either awarding all of the spectrum, or delaying the award--although both those options remain open," Ofcom noted. "Our initial thinking is that it may be appropriate to withhold around 60 MHz of the 190 MHz of spectrum available."
If the merger of O2 and Three does take place, it would reduce the UK wholesale mobile market from four major operators to three. The regulator commented that although it is not Ofcom's role to decide whether these mergers should go ahead, it has a duty to secure the optimum use of spectrum.
Ofcom said will determine later in the year the best approach to making the spectrum available, depending on the feedback it receives and the condition of the market.
As things stand, the regulator plans to issue licences for the 2.3 and 3.4 GHz bands for an indefinite period, but with an initial term of 20 years after which licence fees may be payable. It noted that there would be no coverage obligations placed on this spectrum because the frequencies are better suited for high capacity and faster speeds, rather than achieving wide geographical coverage.
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