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Ofcom Confirm Auction Details for the 2.3GHz and 3.4GHz Spectrum Bands

Tuesday, May 26th, 2015 (11:51 am) - Score 1,586

The United Kingdom’s telecoms regulator has launched a new consultation on their proposed design for the late 2015 or early 2016 auction of radio spectrum in the 2.3GHz and 3.4GHz bands, which could be used for high-capacity Mobile Broadband connectivity (e.g. 4G). But some of the spectrum may be held back until the on-going market consolidation has settled.

The spectrum itself, which will not come attached to any specific coverage obligations (i.e. the higher frequencies don’t go as far and mean it’s not ideal for coverage focused deployments), was formerly used by the Ministry of Defence (MoD) and is now being repurposed for civil use.

It’s widely expected that the spectrum, which includes 40MHz in the 2.3GHz band (2350MHz to 2390MHz) and 150MHz from the 3.4GHz band (3410MHz to 3600MHz), will end up being used for Mobile Broadband style connectivity. But Ofcom also said they won’t prescribe this as a strict requirement.

4g_auction_radio_spectrum_bands_2016

Ofcom has also wisely noted that the UK market for mobile telecoms is currently in a state of flux, due in no small part to BT’s £12.5bn move to buy EE and a similar decision by Three UK’s parent (Hutchison Whampoa) to gobble up rival O2 UK. The impact of this could require some exchanging or sharing of spectrum between operators and as such it presents an awkward problem for Ofcom.

In reflecting this consultation Ofcom has proposed an “option” of not delaying the auction until after the current consolidation has settled down. Instead the regulator has suggested that it could proceed with auctioning the bulk of available spectrum, but they would at the same time withhold some frequencies until a later date.

Separately Ofcom has proposed issuing licences for an “indefinite period“, albeit with an initial term of 20 years after which licence fees may become payable.

Finally, it’s noted that the reserve price will remain broadly unchanged from last year’s proposal. In other words Ofcom has proposed reserve prices for the auction of £1m per 5MHz lot for the 3.4GHz band and in the range of £2.5m – £5m per 5MHz lot for the 2.3GHz band. “Reserve prices set at this level would provide room for relevant price discovery, while still addressing concerns about gaming in the auction,” said Ofcom.

The 2.3GHz band will perhaps understandably attract a higher price because it’s already supported by a lot of hardware and is at a low enough frequency to be very appealing to mobile network operators. The consultation itself will remain open until 26th June 2015.

Ofcoms 2.3GHz and 3.4GHz Auction Consultation
http://stakeholders.ofcom.org.uk/consultations/2.3-3.4-ghz-auction-design/

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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