Uncertainty is one reason Ofcom now proposes to separately auction 2.3 GHz and 3.4 GHz spectrum for commercial use in the United Kingdom.
Ofcom would award most of the newly available spectrum later this year, or early in 2016. Presumably the withheld spectrum would be in the 3.4 GHz band used for unlicensed applications.
The remaining frequencies would be held back for award at a later date. “Our initial thinking is that it may be appropriate to withhold around 60 MHz of the 190 MHz of spectrum available,” Ofcom says.
The 3.4 GHz spectrum will be licensed in 5 MHz lots, to retain maximum flexibility for applications other than Long Term Evolution mobile service. That band is expected to support license-exempt applications such as Wi-Fi, Bluetooth, ZigBee, some medical monitoring equipment and assistive listening devices. As much as 150 MHz will be made available in the 3.4 GHz band.
The 2.3 GHz spectrum is more likely to be used for LTE mobile service, which benefits from larger spectrum blocks. So the 2.3 GHz spectrum will be awarded in 10 MHz lots. A total of 40 MHz of spectrum is available.
The two-award approach would avoid either an auction delay or full auction of all the spectrum.
As proposed, Ofcom would issue licenses for the 2.3 and 3.4 GHz bands for an indefinite period, but with an initial term of 20 years.
There will be no coverage obligations placed on this spectrum, because the frequencies being auctioned are better suited for high capacity and faster speeds, rather than achieving wide geographical coverage, Ofcom says.
The decisions are at least partly based on consolidation in the U.K. mobile market.
BT has announced plans to buy EE, while Hutchison Whampoa has reached agreement to acquire O2 from its current owner Telefonica. If the latter merger goes ahead it would reduce the UK wholesale mobile market from four major operators to three.
