Home
 » ISP News » 
Sponsored

O2 and Three UK Clash Over Ofcom 5G Spectrum Defragmentation Plan

Monday, August 12th, 2019 (8:25 am) - Score 16,385
5G Mobile Wireless Radio Mast

Mobile operator O2 (Telefonica) has criticised Ofcom’s recent proposal to defragment the 5G ultrafast mobile broadband friendly 3.4-3.8GHz radio spectrum bands after next year’s auction, which they complain favours Three UK (H3G) by allowing them to establish a “kingmaker” position from where they can obstruct rivals.

Previously Three UK was at somewhat of a disadvantage in the market – partly of its own making – because they didn’t hold anything like as much mobile friendly spectrum as their rivals at EE, Vodafone and O2. Part of Ofcom’s work over the past few years has thus been orientated around trying to rebalance the market in order to make the differences in spectrum ownership between network operators less dramatic.

The amount and type of spectrum that an operator has is crucial for all sorts of reasons, not least because it can have an impact upon network coverage, rollout costs and particularly data performance (mobile broadband speed). However Three UK is in a different position when it comes to 5G because they already harbour 140MHz of related spectrum, including a single 100MHz contiguous block (rivals tend to have 50MHz or 40MHz blocks).

Ofcom says that 5G is “likely to perform best using large, contiguous blocks of spectrum,” although the main advantage of this is that it avoids higher equipment costs (e.g. operators can use a single antennae, rather than several for bands that are wide apart). A few short months ago the regulator proposed to defragment the 3.4GHz – 3.8GHz radio spectrum bands in order to bring such benefits to other operators (here).

ofcom_5g_uk_spectrum_fragmentation_june_2019

Assuming no change then the next auction in the 3.6GHz – 3.8GHz band(s) will only free up 120MHz of spectrum frequency (i.e. not enough to give more than a single operator access to a contiguous holding of 80MHz). In response Ofcom proposed a mechanism for spectrum trading, which of course would require mobile operators to play nice and fair (not so easy in an aggressively competitive market).

Ofcom’s Defragmentation Proposal

In order to facilitate defragmentation of the 3.4-3.8 GHz band, we are minded to impose a restriction on winners of less than 20MHz of 3.6-3.8 GHz spectrum to bidding only for the top or bottom of the 3.6-3.8 GHz band in the assignment stage of the auction.

In addition, we are also minded to include a negotiation phase, within the assignment stage of the auction, during which winners of 3.6-3.8 GHz spectrum would have the opportunity to agree the assignment of frequencies in the 3.6-3.8 GHz band between themselves.

NOTE: Under the existing plan winners must unanimously agree the new allocations, but there is a fallback option of partial agreement between a subset of winners.

In its first response O2 has accused Ofcom of placing “far too much faith in the secondary market to address fragmentation” and warned of a “high risk that trading amongst the MNOs will not resolve the situation,” not least because the interests of all operators are NOT currently aligned.

Unfortunately, Ofcom’s policies to date have favoured one operator, [Three UK], allowing it to establish a ‘kingmaker’ position, from which it can attempt to extract windfall gains from rivals in return for moving its spectrum, or otherwise expect anti-competitive rents from blocking rivals from acquiring larger contiguous blocks,” said O2.

Naturally Three UK supports Ofcom’s plan, although they want all holders of 3.4-3.8GHz spectrum to participate in the negotiation phase and favour the regulator’s first of two proposals, which requires winners to unanimously agree the new allocations. Ofcom’s second proposal, which Three UK does not support, is one where if the winners fail to reach unanimous agreement then a fallback position is to allow partial agreement between a subset of winners.

However Three UK warns that allowing partial agreement as a fallback could create problems. “Two MNOs could deliberately fail to reach unanimous agreement, safe in the knowledge that they could guarantee being awarded adjacent 3.6GHz spectrum and then trade their 3.4GHz and 3.6GHz spectrum after the auction. By doing this, they would get contiguity for free but crucially, the third MNO would not get contiguity,” said the operator.

Similarly Vodafone said they “profoundly disagree” with the proposals to allow agreement by a subset of bidders to influence operation of the assignment stage (but they do support unanimity in the negotiation phase). “The approach set out in the consultation is discriminatory against Vodafone, hence is unacceptable,” said the operator.

BT (EE) disagreed with the above and said it was “important” for Ofcom to include “the further option of exploring whether partial agreement between a subset (or subsets) of winners can be achieved.” As usual all of the mobile operators have given a perspective that is based on the potential impact upon their own respective market positions, which is much as we’d expect.

Ofcom’s final decision on the upcoming award of spectrum in the 700MHz and 3.6-3.8GHz bands is expected later this year. At present the goal is still to conduct the auction next Spring 2020, at least the regulator hasn’t yet said anything different but delays seem to be par for the course in mobile land where aggressive competition tends to make reaching unanimous agreements rather difficult.

Add to Diigo
Mark Jackson
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.
Leave a Comment
10 Responses
  1. Avatar Mike

    As usual it’s the worst operators that inhibit progress.

  2. Avatar Christopher Dodds

    Three Are A FANTASTIC Mobile Provider And I Personally Have Had No Problems In All The Years I Have Been With Them And Iam Sure They Will Provide An Excellent 5G And Fair.

    • Avatar Name

      It depends where you live and how often you visiting crowded places like airports. In Cambs, Three is a crap and stops working in crowded places like Stansted Airport or town centre Bonfire events. Also network coverage inside of the buildings is atrocious. They think they can replace three-four masts other operators have with just a single one. I lasted 12 months with them.

    • Avatar Paul

      Three are crap in Middlesbrough always capacity issues

    • Avatar Stephen Wakeman

      Why is the first letter of each of your words capitalised? What does your statement bring to the table of the conversation as per the article? Where do you get off thinking that a multinational company is fantastic on the basis that you, a single customer amidst millions of others, have never had a problem? Are you a bot account or a shill or something?

  3. Avatar MartinConf

    @Mark Jackson

    You say Three are H3G in your article so who are UKB In Figure 1

    • Avatar Matthew

      Three own UKB like BT own EE it was one of the best things that Three could of brought puts them in a very strong position for Urban 5G coverage and if they actually put some money into 700MHz auction they will be in a decent position in rural areas if they do a good rollout nationwide.

    • Avatar Name

      @Matthew:
      “…if they do a good rollout nationwide.” No, they will not do this. They will do the minimum and then start complaining.

  4. Avatar The optimist

    I think it amusing we are complaining still about 3G and 4G coverage and we are on to 5G now. Personally it would be good to see Three get some good spectrum. I’m sure Three will invest more to take advantage but there is one way to make this a fairer fight.

    Surely the amount of Spectrum allocated should be proportional to geographic coverage. Give an operator time to deploy the technology but if they don’t offer the coverage they lose Spectrum. That way if you want capacity in Urban areas you will need to build in less attractive and commercially less viable rural areas. Would this not work?

    • Avatar Hihoesilver

      Ofcom already has powers such as these, as example: o2 3G scraped its coverage obligation on a very small geographical area.

      Same as Ofcom not giving BT a fine for manipulation of its revenue, or Three & Vodafone for breaking Net Neutrality last year – it’s quite a toothless Regulator as are most U.K. regulators.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £20.00 (*22.00)
    Avg. Speed 50Mbps, Unlimited
    Gift: None
  • Direct Save Telecom £22.95 (*29.95)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • Origin Broadband £23.00
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • Vodafone £23.00
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • SSE £23.00 (*33.00)
    Avg. Speed 35Mbps, Unlimited (FUP)
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2463)
  2. FTTP (2092)
  3. FTTC (1631)
  4. Building Digital UK (1574)
  5. Politics (1380)
  6. Openreach (1376)
  7. Business (1207)
  8. Statistics (1077)
  9. FTTH (1014)
  10. Mobile Broadband (1005)
  11. Fibre Optic (957)
  12. Ofcom Regulation (902)
  13. Wireless Internet (884)
  14. 4G (874)
  15. Virgin Media (843)
  16. Sky Broadband (585)
  17. EE (576)
  18. TalkTalk (563)
  19. Vodafone (497)
  20. Security (402)
New Forum Topics
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact