Ofcom has today announced updated proposals to release crucial airwaves to meet growing demand for mobile broadband and support the rollout of 5G.
Ofcom manages the UK’s airwaves – or spectrum – a finite resource that is essential for wireless services including mobile phones.
To help improve mobile services and enable more people and businesses to access 5G networks, we are planning to release more mobile airwaves through an auction in spring 2020.
In December 2018 we proposed including coverage obligations in our auction rules. These would have required mobile companies to increase coverage in rural areas, in exchange for winning discounted spectrum through the auction.
Following this, the four mobile network operators – BT/EE, O2, Three and Vodafone – have discussed with Government and Ofcom an alternative ‘Shared Rural Network’ plan to deliver good quality 4G coverage to at least 92% of the UK over six years.
On 25 October, the Government announced that the companies had each committed to reaching this target. The Government has also confirmed it will provide £500 million of funding for the plan. Ofcom welcomes this agreement, which we believe will provide significant benefits to mobile users across the UK.
To make sure mobile companies stick to the commitments, we will write binding conditions into their spectrum licences. Ofcom will also monitor, and report, on their progress in meeting the new commitments.
In light of the commitments, we are no longer proposing to include coverage obligations in our auction. This is because through the companies working together, the agreement will achieve higher coverage than the requirements we could have set through an auction. So we have today published updated proposals for how our mobile auction will work.
The auction will involve companies bidding for spectrum in two different frequency bands.
Ofcom has today revised its proposals for next year’s auction, in line with our objectives to ensure the efficient and timely allocation of spectrum.
For next year’s auction, we plan to use a format known as ‘simultaneous multiple round ascending’. This approach, which is similar to our 2018 spectrum auction, involves two stages. It would work like this:
Winners of 3.6-3.8 GHz spectrum will have an opportunity within the assignment stage to negotiate their placements within the band among themselves. This will make it more straightforward for bidders to join together the new spectrum they win with their existing holdings, and potentially reduce the level of ‘fragmentation’ in the wider 3.4-3.8 GHz band.
Ofcom has a duty to ensure spectrum is used efficiently. We also ensure companies can compete fairly and customers have a strong choice of mobile networks. So to maintain strong competition, we are still proposing to place a 37% cap on the overall spectrum that any one mobile company can hold following the auction. Promoting strong competition between mobile companies is important because it leads to better services for customers.
Philip Marnick, Spectrum Group Director at Ofcom, said: “We’re pressing ahead with plans to release vital airwaves to improve mobile services for customers. Together with mobile companies’ commitments to improve coverage, this will help more areas get better services and help the UK maintain its place as a leader in 5G.”
We welcome responses to our proposals by 9 December. We then plan to publish our final decisions in early 2020, before starting the auction in the spring.