Ofcom Reveal Initial UK 4G and 5G Mobile Spectrum Auction Winners

The UK telecoms regulator has today revealed the preliminary winners from their auction of the new 4G Mobile friendly 2.3GHz and future 5G destined 3.4GHz radio spectrum bands. All of the major mobile operators have won a slice and the total value of the principal stage is £1,355,744,000.

Both bands are being released in order to help boost the performance of 4G and future 5G based Mobile connectivity. In this regard the 3.4GHz band is highly prized because it’s aimed at future multi-Gigabit capable 5G services, which Ofcom says will be needed in order to help Mobile Network Operators (EE, O2, Vodafone and Three UK) to launch “very fast” Mobile Broadband services by 2020.

Overall some 40MHz of frequency in the 2.3GHz band (2350-2390MHz) and 150MHz in the 3.4GHz band (3410-3480MHz and 3500-3580MHz) is being distributed. Ofcom’s spectrum capping means that EE cannot bid on the 2.3GHz band that is immediately usable by operators, although everybody can bid on 3.4GHz due to its importance for 5G.

Results of the principal stage

— Airspan Spectrum Holdings Limited has not won spectrum in either band.

— EE Limited (BT) has won 40MHz of 3.4GHz spectrum at a cost of £302,592,000.

— Hutchison 3G UK Limited (Three UK) has won 20MHz of 3.4GHz spectrum at a cost of £151,296,000.

— Telefónica UK Limited (O2) has won all 40MHz of 2.3GHz spectrum available, at a cost of £205,896,000; and 40MHz of 3.4GHz spectrum at a cost of £317,720,000.

— Vodafone Limited has won 50MHz of 3.4GHz spectrum at a cost of £378,240,000.

Most of the results won’t come as a surprise and we were expecting O2 to grab a large slice of spectrum, not least because debt laden Telefonica are keen to pump up the value of their UK brand ahead of a possible £10bn market listing or sale.

However it’s perhaps a little disappointing to see that Three UK’s parent has so far chosen not to spend big in order to acquire a larger chunk of spectrum, although they do already have quite a bit in the 3-4GHz range from their purchase of UK Broadband Ltd. (Relish Wireless).

Philip Marnick, Spectrum Group Director at Ofcom, said:

“This is good news for everyone who uses their mobile phone to access the internet. As a nation we’re using ever more mobile data on smartphones and mobile devices. Releasing these airwaves will make it quicker and easier to get online on the move. It will also allow companies to prepare for 5G mobile, paving the way for a range of smart, connected devices.”

UK Digital Minister, Margot James MP, said:

“This spectrum will be instrumental in further improving 4G mobile services now, while helping the UK to lead the 5G revolution and build a Britain that is fit for the future. We hope that it can now be deployed as soon as possible for the benefit of consumers right across the UK.”

Ofcom will now move to the ‘assignment’ stage, which is the last bidding stage of the auction. This is a short process, which allows companies who have won spectrum in the principal stage to bid to determine where in the frequency bands their new spectrum will be located.

After the end of the assignment stage, the regulator will issue the winning bidders with licences to use the relevant spectrum within a few days, allowing them to begin putting it to use. The final auction results will be known shortly after.

Neither of the new bands are expected to hugely improve the coverage of existing networks (this auction is more about service speed and capacity), particularly in rural areas, and for that we’ll have to wait another year or so until the 700MHz band is auctioned off.