After a number of delays, the UK’s first auction of 5G spectrum is underway, with five bidders hoping to secure a share of the spoils.
EE, O2, Three, and Vodafone will all be bidding, alongside small cell operator Airspan. Fixed wireless broadband operator, Connexin, was also approved as a bidding participant, but withdrew from the process last week.
But what is it that that these major players are bidding for? Well, up for grabs is 40MHz worth of the 2.3GHz airwaves, which can be used right away to support existing 4G services, and 150MHz of 3.4GHz of bandwidth that is earmarked for 5G in 2020.
A fair spectrum cap
The auction is the first to be subject to Ofcom’s new spectrum cap. The regulator says its intends to limit any one operator to just 255MHz of ‘immediately usable’ spectrum (800MHz, 900MHz, 1400MHz, 1800MHz, 2100MHz and 2.6GHz) and 340MHz of all airwaves available in the UK – in effect a cap of 37%.
BT-EE already has its hands on 255MHz, and as a result will be unable to bid for the 2.3GHz band, however it is free to compete for the 3.4GHz spectrum. As a further example, Vodafone has 176MHz therefore would be limited to 85MHz of each; while Airspan, Three and O2 have no restrictions.
The auction will comprise two stages. The first, determines how much spectrum has been won by each bidder, and, the second, will determine where in each band this is located. Notably the process could take several weeks.
Ofcom has been keen to stress that its role is to maximise the efficiency of the spectrum and its value to society – not to raise revenue. There were some suggestions that the £2.31 billion raised by the 2013 auction of 4G spectrum was disappointing given that some estimates were as high as £4 billion.
Many industry observers have expressed that they are wary and did not want a repeat of the infamous 3G auction in 2000. This auction generated £22 billion for the treasury and restricted the ability of operators to invest in infrastructure.
“Our job is to release these airwaves quickly and efficiently, and we want to see them in use as soon as possible,” said Philip Marnick, Ofcom’s spectrum group director.
“We are glad the auction is now underway. This spectrum will help improve people’s experience of using mobile broadband today, and also help companies prepare for future 5G services.”