Operators got a good deal for the 700MHz spectrum – but may still have to pay more for the 3.6–3.8GHz airwaves depending on the next phase
First phase wrapped up in a matter of days: Ofcom today announced that the first phase of the latest 5G spectrum auction has ended, after less than a week of bidding, and having been delayed because of COVID-19. While we know how much spectrum has been won by each operator, it will take the next phase to decide where each spectrum lot will sit in the 3.6–3.8GHz band. Bidders will be able to negotiate the positions of spectrum lots between themselves, so that their new spectrum lots are contiguous to those they were already holding in the wider 3.4–3.8GHz band.
A low price, comparatively, for the 700MHz spectrum: In the 700MHz band, the FDD spectrum lots were equally distributed between EE, Three, and O2. Each operator won 2x10MHz for the same price (£280m). EE won all the four unpaired SDL lots, totalling 20MHz, for which it paid the reserve price (£4m). This makes the UK 700MHz spectrum comparatively cheap in terms of price per MHz per capita. The cost of these airwaves was 0.22 $/MHz/pop, a lot lower than what operators paid in France (0.78) Sweden (0.74) and Italy (0.63), and slightly lower than what was paid in Germany (0.23).
There may yet be a reshuffle in the wider 3.4–3.8GHz band: The 3.6–3.8GHz band spectrum was also equally awarded to three operators. EE, O2 and Vodafone each obtained 40MHz. EE and O2 both paid £168m, with Vodafone paying slightly more at £176.4m. This translates into 0.09 $/MHz/pop – lower than what operators paid for the 3.5GHz band in 2018 (0.15). Operators in Italy paid a lot more for this spectrum (0.41) whereas in Spain, MNOs had a better deal (0.05). The assignment stage could see the final price increase. Regardless of the results of these negotiations, Three will be the only operator to have a contiguous block of at least 100MHz in the wider 3.4–3.8GHz band, with Vodafone holding 50MHz in the 3.4–3.6GHz range, and O2 and EE each having only 40MHz.
