U.K. regulator Ofcom announced plans to hold a 5G spectrum auction in January 2021, rejecting calls from some carriers which had suggested a direct allocation process rather than a traditional sale.
In a statement, Ofcom stated the auction would cover the sale of 80 megahertz in the 700 MHz band and 120 megahertz of spectrum in the 3.6GHz-3.8GHz band.
Ofcom noted that the auction will increase the total amount of spectrum available for mobile operators in the U.K. by 18%.
“Demand for getting online on the move is soaring, and the pandemic has only increased the importance of mobile services to people and businesses. Releasing these airwaves promptly will bring a much-needed capacity boost, helping mobile customers get a better service,” said Philip Marnick, Ofcom’s Spectrum Group Director.
Some mobile operators had argued for the spectrum to be allocated through an administrative process, instead of an open auction. In June, U.K. telecommunications group Vodafone had called for the government to abandon this upcoming spectrum of 5G spectrum, following the government decision to ban the use of Huawei gear in future networks.
Vodafone U.K. CEO Nick Jeffrey said that those operators that are required to remove Huawei’s gear from their networks will have to use financial resources that could have been used to acquire 5G spectrum.
Having examined this suggestion, the regulator said that a decision of that kind would not meet its duty to secure optimal use of the UK’s spectrum.
Ofcom confirmed that it will be releasing 80 megahertz of spectrum in the 700 MHz band, following a four-year program to clear the band of its existing uses for digital terrestrial TV and wireless microphones. The regulator explained that these airwaves are ideal for providing good-quality mobile coverage, both indoors and across very wide areas – including the countryside.
The regulator is also releasing 120 megahertz of spectrum in 3.6-3.8 GHz band. Ofcom highlighted that these airwaves are part of the primary global band for 5G and capable of carrying lots of connections in concentrated areas.
In the spectrum auction, Ofcom will offer six lots of 2×5 megahertz in the 700 MHz band with a reserve price of £100 million ($130.4 million) per lot. The process will also include four lots of 5 megahertz of 700 MHz downlink-only spectrum, with a reserve price of £1 million per lot and 24 lots of 5 megahertz of 3.6-3.8 GHz spectrum, with a reserve price of £20 million per lot.
Ofcom also confirmed that it will not include any coverage obligation in the spectrum auction and that it will implement an auction format known as “simultaneous multiple round ascending” (SMRA).
Ofcom has imposed a 37% cap on overall spectrum holdings. As a result, BT and EE will be allowed to obtain a maximum of 120 megahertz, while Three and Vodafone will be able to secure up to 185 megahertz and 190 megahertz respectively. Due to its current spectrum holdings, O2 will not be restricted by the cap, Ofcom said.
U.K. operators have already launched commercial 5G services.
