About 190 MHz of communications spectrum in the United Kingdom 2.3 GHz and 3.4 GHz bands will be shifted from military to commercial uses. Still undetermined are the bidding processes and rules, which many believe could involve set-asides to promote competition in the market. Often, that takes the form of reserving a certain amount of spectrum for smaller bidders or new entrants. Ofcom likely will have to devise rules in light of consolidation at the top of the U.K. market, assuming BT’s acquisition of EE assets, and Hutchison’s acquisition of Telefonica assets are approved. Whether, in the long run, such set-asides actually work is open for debate. But there is a belief that the new spectrum will be better suited to boost capacity, rather than coverage, and is more valuable in high-density areas than rural areas, for example.
The frequencies being awarded include 40 MHz of spectrum within the 2.3 GHz band (2350-2390 MHz) and 150 MHz of spectrum within the 3.4 GHz band (at 3410-3480 MHz and 3500-3580 MHz). At present, Ofcom does not plan to restrict use of the spectrum for backhaul or end user retail coverage. Ofcom currently proposes that the spectrum be sold in lots of 5 MHz and that bidders will be able to specify a minimum requirement of up to 20 MHz.
As currently envisioned, there will be one category of eifht lots in the 2.3 GHz band and 30 lots in one category of the 3.4 GHz band. Ofcom has proposed minimum reserve prices in the 2.3 GHz band in the range of £2.5 million to £5 million per 5 MHz lot and for the 3.4 GHz band £1 million per 5 MHz lot. Ofcom has said “some competition measures are justified in the 2.3/3.4 GHz auction.” That currently is seen as including an overall cap in the auction on the amount of mobile spectrum that may be held by one company of 310 MHz.
