Mobile News

UK report recommends spectrum caps ahead of auctions May 14, 2009

The UK government has issued an independent report on dividing existing and future mobile network spectrum. After the mobile operators were unable to reach an industry agreement on their existing spectrum holdings, the government asked former Ofcom director Kip Meek to act as an independent broker and develop a plan for the 2G and 3G spectrum. His proposals also incorporate the 2.6GHz spectrum for Wimax and LTE and the so-called digital dividend in the 800 MHz band, which still must be auctioned. According to the report, the goal is to give network operators certainty on their future investments, encourage further take-up of mobile broadband and use new technologies to achieve the government’s goal of near universal broadband access. A quick and efficient division of the spectrum could mean all of the UK enjoying mobile broadband at 4 Mbps within five years, while many urban years would see up to 50 Mbps.

On the spectrum to be auctioned, Meek proposes an auction of the TDD 2.6GHz spectrum for Wimax services by year-end, and a later auction combining the FDD 2.6GHz and 800 MHz frequencies. Meek would like to see regional and speed obligations on services deployed in the 800 MHz band to enhance broadband access, while the current 3G licence holders would receive incentives for expanding broadband access, such as indefinite licence terms and relaxed rules on rural infrastructure sharing.

To enhance competition, Meek proposes a temporary cap on spectrum holdings, at 2 x 60MHz for overall mobile FDD spectrum. Existing holders of sub-1GHz frequencies would also face a cap, so as to obtain 800MHz frequencies they must give up 900MHz holdings. The caps would expire a year after the combined spectrum auction. The latter cap applies to Vodafone UK and O2 UK, who each already have 2 x 17.2MHz in the 900MHz band. Orange UK and T-Mobile UK each have 2 x 30MHz at 1800 MHz. While they could bid freely for 800MHz or any 900MHz given up by the other two operators, they would only be able to bid for 2 x 10Mhz of the 2.6GHz frequencies in order to remain under the cap. They would have to give up 1800MHz or 2.1GHz frequencies to gain more in the 2.6GHz band. 3 UK and any new entrants would be able to bid freely for any of the spectrum, within the limits of the auctions. Meek’s proposals will go to the department for business and regulatory reform, which will formulate a government decision for Ofcom to enact.

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