Ofcom will leave contiguity to the operators in next spectrum auction

Ofcom has released the latest ruleset for its next spectrum auction, the date of which has not yet been released.

 

The auction will see the available mobile spectrum increase by 18%, with 80 MHz being made available in the invaluable 700 MHz band, and 120 MHz in the 3.6–3.8 GHz band.  

 

While this is of course good news for the operators – who are facing a 40% increase in customer data usage year on year, according to Ofcom’s Spectrum Group direct Philip Marnick – it does come present some issues. 

 

All of the UK operators, except for Three, who owns a large block of spectrum at the upper end o the currently available band, will be facing the prospect of fragmented spectrum holdings, which means more active antennas and lower spectrum efficiency. As a result, these companies all petitioned Ofcom to step in and help consolidate their spectrum as part of the new auction.

 

Ofcom, however, has refused, saying it goes beyond their remit to reassign and defragment the band, which would alter existing licences.

 

“In the circumstances, we do not consider that it is appropriate or proportionate for us to intervene to guarantee spectrum contiguity for all operators,” they said in a statement.

 

Ofcom will however facilitate negotiations between the operators, giving them a four-week discussion period to make deals during the auction.

 

Three is, at least theoretically, the least incentivised operator trade under these circumstances, but Ofcom has been assured that Three is willing to play ball with the others and “has incentives to trade”.

 

This move by Ofcom makes the upcoming spectrum auction even more tactical and dynamic, giving operators the potential to buy spectrum that are not optimal for their own networks, simply to use it as a bargaining chip with their rivals. 

 

With the 3.6-3.8 GHz band not expected to be nationally available until 2022, the operators likely have a plenty of time to plot their angle of attack.