Ofcom sets £70M reserve price for 2.3 and 3.4 GHz spectrum

Ofcom confirmed plans to release new airwaves that could be used to meet the growing demand for mobile broadband services, setting a total reserve price of £70 million (€97 million/$107 million) and targeting early 2016 for the auction process.

The UK regulator also said it has decided to auction the newly available spectrum in the 2.3 GHz and 3.4 GHz bands without imposing spectrum caps or withholding spectrum for auction at a later date. In detail, the reserve price has been set at £10 million for a 10 MHz block in the 2.3 GHz band and £1 million for a 5 MHz block in the 3.4 GHz band.

Ofcom said its current intention is to open applications for the auction during December and for bidding to start early next year.

Philip Marnick, Ofcom Spectrum Group director, said: "Spectrum is the essential resource which fuels the UK's wireless economy. This auction is an important step in ensuring that the UK has the wireless capability to deliver and support new technology. We're responding to rapid change and innovation in the communications sector, which is placing greater demands on spectrum. Part of our plan to meet this demand is by making new spectrum available and allowing it to be used in a number of different ways."

The UK Ministry of Defence (MOD) is releasing the 2.3 GHz and 3.4 GHz bands as part of government plans to make 500 MHz of spectrum available for civil use by 2020.

A total of 190 MHz of new spectrum will be auctioned -- 40 MHz of spectrum within the 2.3 GHz band (2350-2390 MHz) and 150 MHz of spectrum within the 3.4 GHz band (at 3410-3480 MHz and 3500-3580 MHz).

Ofcom previously held consultations on whether or not to impose spectrum caps to ensure one operator does not acquire a very large amount of the spectrum.

In May, it also sought feedback 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. Due to potential changes on the market, such as BT's planned acquisition of EE and the proposed merger of O2 UK with Three UK, Ofcom had considered withholding around 60 MHz of the 190 MHz of the spectrum available.

Following feedback from the industry, Ofcom said it has now decided to auction all newly available spectrum without imposing caps or withholding spectrum for auction at a later date, and will hold a combined auction for both bands.

The regulator said believes that any cap could prevent a bidder from buying large blocks of adjacent spectrum. "Large blocks have the potential to support very fast download speeds, meaning even faster mobile broadband for consumers, which helps pave the way for 5G," it said.

Ofcom further noted that many existing mobile handsets including the Apple iPhone 6, HTC Desire and Samsung Galaxy are already compatible with the 2.3 GHz spectrum. The band is so far being used for high-speed 4G mobile broadband networks in 10 countries outside Europe, including China, India and Australia.

The 3.4 GHz band is currently being used for 4G mobile broadband in six countries including the UK, Canada and Spain.

For more:
- see Ofcom's statement on the auction process
- see the Ofcom press release

Related articles:
Ofcom makes final decision on UK spectrum fee hike
Meet the new sheriffs of European telecoms regulation
Qualcomm agrees €139M L-band spectrum deal with Vodafone UK and Three UK
Ofcom considers 2-pronged approach to 2.3 and 3.4 GHz award
Ofcom identifies 'preliminary set of bands' above 6 GHz for 5G

 

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