What you need to know about Ofcom’s spectrum auction

20 March 2018

Ofcom has started an auction to release more airwaves to improve mobile broadband capacity, and help prepare for future 5G services.

Here we look at the key things you need to know about what is being auctioned, who will be bidding and what benefits you will see as a result. We have also published a guide to how the auction will work.

Q: What is spectrum?
A: You can’t see or feel radio spectrum. But any device that communicates wirelessly needs spectrum – such as televisions, car key fobs, baby monitors, wireless microphones and satellites. Mobile phones use spectrum to connect to a local mast so people can make calls and access the internet.

Q: Why does Ofcom manage spectrum use?
A: Only a limited amount of spectrum is available, so it needs to be managed carefully. Certain bands of spectrum are also used for different purposes. For example, mobile companies use different parts of the spectrum to TV companies. So, it needs to be managed to prevent services interfering and causing disruption to people and businesses.

Q: How much spectrum is available in this auction?
A: A total of 190 MHz of spectrum is being sold across two frequency bands: 40 MHz in the 2.3 GHz band, which will be used to increase mobile broadband capacity for today’s users; and 150 MHz in 3.4GHz, which has been earmarked for 5G – the next generation of mobile technology. Releasing this spectrum will increase the capacity of mobile networks by around one third.

Q: Who is taking part?
A: Five companies have been approved to bid in the auction: Airspan Spectrum Holdings Ltd; EE Limited; Hutchison 3G UK Limited; Telefonica UK Limited and Vodafone Limited.

Q: How much does Ofcom expect the auction to raise?
A: There is a £70m reserve price, with the value increasing round by round as bids are made. The total amount raised will be determined by demand for the spectrum available. Importantly, Ofcom’s duty is to manage the use of spectrum efficiently – not to maximise the financial value of the auction.

Q: When will we know the results?
A: Spectrum auctions can take a number of weeks to complete. So, the length of the auction will depend on the level of demand from bidders for the spectrum being made available. Ofcom will publish updates on the price and level of demand at the end of each day during the auction.

Q: What difference will the extra airwaves make to mobile phone users?
A: Releasing these airwaves will ease congestion for mobile broadband, both now and in the future. It means people will be able to get online faster and enjoy more reliable mobile connection when on the move. In addition, releasing the 5G airwaves will pave the way for new services that make the most of the instant, reliable and consistent connections offered by 5G.