Ofcom said the process to award frequencies in the 2.3 GHz and 3.4 GHz band could take several weeks
U.K. telecom services regulator Ofcom has officially kicked off the process to award 5G spectrum. Ofcom said the six companies approved to bid in the auction are EE (BT), O2 (Telefonica), Vodafone, Three (Hutchison 3G UK), Connexin Limited and Airspan Spectrum Holdings.
The watchdog aims to award 150 megahertz of spectrum in the 3.4 GHz band and 40 megahertz of spectrum in the 2.3 GHz band. The regulator said part of the spectrum to be auctioned – the 2.3 GHz band – can be used by mobile carriers immediately to improve services, while the 3.4 GHz spectrum band can be used for future 5G mobile services.
During the auction, companies will bid for lots of spectrum over a series of rounds. The 5G spectrum auction can take a number of weeks as the length of the whole process will depend on the level of demand from bidders, the regulator said. The total value of the auction will also be determined by the level of demand.
“Our job is to release these airwaves quickly and efficiently, and we want to see them in use as soon as possible. This spectrum will help improve people’s experience of using mobile broadband today, and also help companies prepare for future 5G services,” said Philip Marnick, Ofcom’s spectrum group director.
Ofcom has set two caps on the amount of spectrum operators can hold, in order to protect competition in the market. The first cap stipulates that mobile operator EE, which currently holds most of mobile frequencies, will not be able to bid for any spectrum in the 2.3 GHz band. The second is an overall cap on how much a single company can hold after the auction.
Ofcom also highlighted that the auction will be split into two different stages. The principal stage will determine how much spectrum each company secures. A later stage then determines where airwaves won by each bidder are located within the radio spectrum.
Ofcom had initially planned to hold the 5G spectrum auction last year, but the process has been delayed by litigation brought by local carriers Three and BT/EE.
In September 2017, Three filed a legal challenge against Ofcom relating to the terms of the proposed 5G spectrum. Last year, the regulator announced it would impose an additional cap of 340 megahertz on the overall amount of mobile spectrum a single operator can hold as a result of the auction. This cap amounts to 37% of all the mobile spectrum expected to be useable in 2020, which includes not only the spectrum available in the 4G/5G auction but also the 700 MHz band.
In its claim, Three said Ofcom should impose a 30% limit on spectrum allocated to any single operator in a bid to weaken the mobile data market dominance of EE and Vodafone. The company has rejected Ofcom’s proposed limit of 37% as inadequate. On that same month, EE also filed a legal appeal around Ofcom’s forthcoming 4G/5G spectrum auction. The specific aim of the suit was to stop Three’s own legal challenge and intention to impose a 30% limit on spectrum allocated to any single operator.
The High Court rejected these claims in December 2017, and earlier this month, the Court of Appeal refused Three permission to appeal that decision.