On 11 July 2017, Ofcom announced that it would be auctioning (i) 40 MHz of spectrum in the 2.3 GHz band; and (ii) 150 MHz of spectrum in the 3.4 GHz band in the UK in late 2017. Ofcom has decided to impose spectrum caps to, in Ofcom’s words, ‘safeguard competition‘. It remains to be seen whether any of the market participants challenge Ofcom’s decision on spectrum caps. Ofcom also published an Information Memorandum for prospective bidders and issued a consultation on the auction regulations. The consultation closes on 14 August 2017. Whilst the 2.3 GHz spectrum can be used for current LTE (4G) services, the 3.4 Ghz spectrum is expected to support faster next generation mobile (5G) services.
Ofcom’s decision on spectrum caps
Ofcom’s diagram shown below shows the impact on current market participants of Ofcom’s two proposed spectrum caps:
- a 255 MHz cap on the “immediately useable” spectrum that any one operator can hold as a result of the auction; and
- a 340 MHz cap on the overall amount of mobile spectrum a single operator can hold as a result of the auction.
The 2.3 GHz spectrum will be auctioned in 10 MHz lots, each with a reserve price of £10 million and the 3.4 GHz spectrum will be auctioned in 5 Mhz lots, each with a reserve price of £1 million.