Ofcom on Tuesday proposed splitting its planned auction of spectrum in the 2.3 GHz and 3.4 GHz bands into two parts to account for ongoing M&A activity in the U.K. market.
The U.K. telecoms regulator has opened a new consultation into the auction that is due to take place later this year or in early 2016.
The market has changed since it last consulted on its auction plans in November last year, Ofcom said, referring to BT’s planned £12.5 billion acquisition of EE and, more importantly, the proposed merger of 3UK with O2, which will red uce the number of mobile network operators in the country to three from four.
Ofcom is asking would-be auction participants to comment on a proposal that would see it sell off most of the available spectrum as planned, with some airwaves being held back to be awarded at an unspecified later date. Ofcom believes this is preferable to its other options, namely to award all the spectrum as planned or to delay the whole process.
There is a total of 190 MHz of spectrum up for grabs, 40 MHz in the 2.3 GHz band and 150 MHz in the 3.4 GHz band. Ofcom is proposing withholding around 60 MHz for a later sale.
It will decide on the best approach later in the year, after receiving feedback from the industry and taking into account the state of the market. The consultation period will close on 26 June.
"It is not Ofcom’s role to decide whether these mergers should go ahead. This rests with the relevant competition authorities," the regulator said in a statement.
"However, Ofcom has a duty to secure the optimum use of spectrum," it added.
Ofcom has not imposed any specific use restrictions on the spectrum, which is being freed up by the military for civilian use, but has repeatedly noted that the airwave are particularly suited to mobile data.
"Ofcom’s objective is to award the frequencies in a way that will allow consumers to enjoy greater access to high-capacity mobile Internet without undue delay," the regulator said.
As a result of its November consultation, Ofcom was able to confirm that the spectrum sale will take place via a single multi-round ascending auction process, rather than a combinatorial clock auction (CCA).
It reiterated that the 3.4-GHz spectrum will be sold in 5 MHz lots, but changed its view on the 2.3 GHz band, which will be divided into 10 MHz lots.
It also said it sees no reason to alter the reserve prices it outlined last year: £2.5 million-£5 million per 5 MHz of 2.3- GHz spectrum and £1 million per 5 MHz block of 3.4-GHz spectrum. As a result, the U.K. should raise upwards of £50 million-£70 million from the sale.
