Ofcom Set Late 2015 Auction for 2.3GHz and 3.4GHz Mobile Broadband Bands

The national UK telecoms regulator has today confirmed that it plans to conduct an auction of spare radio spectrum in the 2.3GHz and 3.4GHz bands during late 2015 or early 2016, which is most likely to be snapped up by mobile operators (e.g. Three UK, Vodafone, O2 and EE) for use in the delivery of 4G (LTE) based Mobile Broadband connectivity.

The spectrum, which was formerly used by the Ministry of Defence (MoD) and is now being repurposed, includes 40MHz in the 2.3GHz band (2350MHz to 2390MHz) and another 150MHz will come from the 3.4GHz band (3410MHz to 3600MHz).

Officially “no specific uses for this spectrum have been prescribed“, although mobile operators are the primary target. Other countries already use the 2.3GHz band for exactly this purpose (e.g. Apple iPhone 5 / 6, HTC Desire and Samsung Galaxy are already compatible with 2.3GHz). Meanwhile UK Broadband Ltd. (Relish) uses a different slice of 3.4GHz in the UK for its fixed wireless 4G network.

Both bands are fairly high frequency and so would struggle to travel as far as the lower frequency ones (e.g. 800MHz and 900MHz). Never the less high frequency bands are usually better at carrying a lot of data, which can make them especially useful in urban areas where the demand for data is usually strongest.

Philip Marnick, Ofcoms Spectrum Group Director, said:

“Today marks an important step in ensuring that the UK has sufficient spectrum to support our wireless economy. It comes in response 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. One important way of meeting this demand is making new spectrum available and its use as flexible as possible.”

As usual Ofcom claims that its auction will be “fair and transparent“, with the spectrum being awarded to “those who can put it to the most efficient use and in the best interests of consumers“. The regulator proposes to auction the spectrum in 38 lots of 5MHz, while bidders will be able to request a minimum bid of four lots per band.

A “safeguard cap” has also been introduced to limit operators’ mobile spectrum holdings to 37% of relevant spectrum (this overall spectrum cap will include the newly-auctioned spectrum). Ofcom has also proposed a Reserve Price of between £2.5m to £5m per lot for the 2.3GHz spectrum, and £1m for the 3.4GHz spectrum. The total value of the proposed reserve prices would be between £50 and £70m.

Previous auctions have tended to be beset by legal and competition squabbles between the major mobile operators, although such issues are unlikely to blight the process this time around as there appear to be fewer competing interests. Never the less Ofcom has said that its consultation will remain open until 23rd January 2015 and the responses will surely reveal if any problems are likely to crop up.

On the other hand the Government’s recent move to force mobile operators into adopting a controversial National Mobile Network Roaming policy (here) might yet cause problems for the process, although technically the roaming policy only applies to 2G and the above spectrum is intended for 4G and possibly future 5G uses.