Ofcom acted immediately to manage expectations regarding a fresh sale of spectrum the UK regulator said could be used by mobile operators to augment 4G coverage, by noting bids will be judged based on the value the services will bring to consumers rather than out and out price.
The UK regulator is inviting interested parties to comment on proposals covering the auction of high-capacity spectrum in the 2.3GHz and 3.4GHz bands, with a view to holding the sale in late 2015 or early 2016. Ofcom said the auction could raise between £50 million (€63.6 million/$79.4 million) and £70 million in total, based on reserve prices of between £2.5 million and £5 million per lot for the 2.3GHz spectrum, and £1 million for the 3.4GHz blocks. The spectrum will be auctioned in 38 lots of 5MHz, with a minimum bid of four lots per band.
Ofcom states it is seeking bids that offer the most efficient use of the spectrum being auctioned, and those that maximise consumer value. That hints the regulator is seeking to manage expectations regarding the total amount raised by the auction, after being criticised over the sum raised in an auction of 1800MHz and 2.6GHz frequencies in February 2013.
The previous auction raised £2.4 billion compared to £3.5 billion the UK government expected from the sale. The National Audit Office subsequently said it was impossible to judge the value of the value of the sum without also assessing the value that winning bidders delivered to consumers.
Ofcom concedes there is no specific use for the spectrum being considered for its next auction, but noted it is "likely to interest the mobile industry" for wireless broadband services.
Philip Marnick, Ofcom Spectrum Group director, said the consultation is "an important step in ensuring that the UK has sufficient spectrum to support our wireless economy.
The regulator is reacting to the "fast pace of change and innovation taking place in the communications sector, which is placing increased demands on how spectrum is used by all industries," Marnick added.
Ofcom plans to close its consultation in late January, and noted the new spectrum will be included in plans to cap mobile operators' spectrum holdings to 37 per cent of relevant spectrum.
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