Telecom Operators

Three UK disapproves of Ofcom’s spectrum auction announcement

The UK’s telecom regulator Ofcom announced that later this year it will auction licenses to use 190 MHz of spectrum in two frequency bands, to increase the airwaves available for mobile devices by almost one third. Ofcom said it is helping meet strong demand by releasing extra spectrum, allowing mobile operators to increase their networks’ capacity.

However, UK operator Three publicly disapproved of Ofcom’s announcement in a statement, saying Ofcom’s proposal is “a kick in the teeth for all consumers and in particular for the near-200,000 people who signed up to the ‘Make the Air Fair’ campaign.”

Three launched the campaign in late 2016 calling on consumers to help it fight for a 30 percent spectrum cap before the spectrum auction. The campaign aimed to tackle rival operator BT/EE’s alleged “spectrum dominance”. BT/EE own more than 40 percent of the UK’s available spectrum, and Three has expressed concern that the upcoming auction will enable the two operators to gain more spectrum, thus increasing their dominance.

“By making decisions that increase the dominance of the largest operators, Ofcom is damaging competition, restricting choice and pushing prices up for the very consumers that it is meant to protect,” said Three’s statement. “The mobile market is imbalanced and failing customers. Ofcom has shown little interest in tackling the problem. We will consider our response as a matter of urgency.”

40 MHz of spectrum will be auctioned in the 2.3GHz band by Ofcom. This band is already supported by mobile devices from manufacturers such as Apple and Samsung. These airwaves could be used immediately after release to provide extra capacity, meaning faster downloads and internet browsing for mobile users, according to Ofcom.

In addition, 150 MHz of spectrum will be auctioned in the 3.4GHz band. These airwaves are not compatible with most current mobile devices, but are expected to be usable by future phones and tablets. The 3.4GHz band has been identified as central to the rollout of 5G mobile across Europe.

Ofcom has expressed its intention to reduce BT/EE’s overall share of mobile spectrum by imposing two different restrictions on bidders: “These will limit the amount of spectrum operators can win in the 2.3GHz band; and place overall limits on the spectrum an operator can win across the 2.3GHz and 3.4GHz bands in aggregate,” said the regulator in a statement.

Ofcom said it will place a cap of 255 MHz on the “immediately useable” spectrum that any one operator can hold as a result of the auction. This cap means BT/EE will not be able to bid for spectrum in the 2.3GHz band. In addition, Ofcom will place a new, additional cap of 340 MHz on the overallamount of mobile spectrum a single operator can hold as a result of the auction. This cap amounts to 37 percent of all mobile spectrum expected to be useable in 2020, which includes not only the spectrum available in this auction but also the 700MHz band.

“Taken together, the effect of the caps will be to reduce BT/EE’s overall share of mobile spectrum; the company can win a maximum 85 MHz of new spectrum in the 3.4GHz band,” said Ofcom. “The overall cap also means that Vodafone could gain a maximum 160 MHz of spectrum across both the 2.3GHz and 3.4GHz bands.”

Philip Marnick, Ofcom’s Spectrum Group Director, said: “Spectrum is a vital resource that fuels the UK’s economy. We’ve designed this auction to ensure that people and businesses continue to benefit from strong competition for mobile services.”

Marnick added: “We want to see this spectrum in use as soon as possible. With smartphones and tablets using even more data, people need a choice of fast and reliable mobile networks. These new airwaves will support better services for mobile users, and allow operators to innovate and build for the future.”