The regulator has revised its proposals for the award of the 700MHz and 3.6–3.8GHz bands following industry agreement to improve 4G coverage.
Background: In December 2018, Ofcom consulted on proposals to improve mobile coverage in the UK. These were attached to the upcoming award of spectrum in the 700MHz and 3.6–3.8GHz bands. They included the opportunity for bidders to get a discount on the cost of spectrum, in return for accepting obligations to improve mobile coverage. Following the consultation, the four UK MNOs discussed an alternative ‘shared rural network’ plan, which was accepted by Government. In light of these commitments, Ofcom is now revising its proposals for the upcoming auction by removing the coverage obligations it had previously set out.
What’s different? The main differences relate to the proposed removal of the two coverage obligations lots in the auction design and to now use a simultaneous multiple round ascending (SMRA) format as opposed to the combinatorial clock auction (CCA) format previously proposed. This SMRA approach, is similar to the 2018 spectrum auction, which involved the 2.3GHz and 3.4GHz bands.
The proposed spectrum cap stays: Under the new proposals, Ofcom has retained the 37% cap on the overall spectrum that any one mobile company can hold following the auction. The cap on overall spectrum holdings has the effect of restricting existing mobile operators to acquiring the following amounts: BT/EE – 120MHz; Three UK – 185MHz; Vodafone – 190MHz; Due to its current spectrum holdings, O2 will not be restricted by the cap. Ofcom has justified the choice with the need to protect competition and efficient use of spectrum.
The auction is now planned for Spring 2020: Ofcom will now run a consultation on the revised proposal, until 9 December 2019. The regulator is aiming to start the auction by the Spring of 2020, and will set out conditions in detail based on the result of the consultation.
