5g spectrum auctions

Ofcom raises over £1.3bn in latest round of auctions for 5G airspace

Image credit: reuters

The UK’s largest mobile network operators have agreed to pay Ofcom over £1.3bn for additional 5G airspace that has been auctioned off.

A total of 200MHz of spectrum was available to bid for in the auction, split across two bands. 80MHz of spectrum could be located in the 700MHz band, which is ideal for providing wide area coverage in more remote locations with sparser mobile towers.

The other 120MHz of spectrum is in the 3.6-3.8GHz band, which is part of the primary band for 5G and capable of boosting mobile data capacity.

The four networks, EE, O2, Three and Vodafone, took part in the principal stage of the auction, which involved them bidding for airwaves in 34 ‘lots’ to determine how much of the available spectrum they each secured.

EE purchased the largest chunk of spectrum, winning 40MHz in the 700MHz band at a cost of £284m, with an additional 40MHz in the 3.6-3.8GHz band at a cost of £168m.

O2 won 20MHz in the 700MHz band at a cost of £280m and 40MHz in the 3.6-3.8GHz band at a cost of £168m.

Three won 20MHz of spectrum in the 700MHz band at a cost of £280m and Vodafone won 40MHz in the 3.6-3.8GHz band at a cost of £176.4m.

Ofcom said the total revenue raised from this principal stage is just under £1.36bn, with all money going to the Treasury.

The auction will now move to the ‘assignment’ stage. This process involves a single bidding round in which the companies can bid for the frequency positions they prefer for the airwaves they have secured in the principal stage.

After submitting their assignment stage bids in the 3.6-3.8GHz band, bidders will then have the opportunity to negotiate the frequency positions among themselves – if they want to join together the airwaves they have secured with spectrum they already hold in the wider 3.4-3.8GHz band.

This will be subject to whether the companies wish to enter the negotiation period.

Last year, in a bid to expand rural mobile coverage, the government signed a £1bn deal with network operators to share their network coverage in order to try and fill blackspots.

Philip Marnick, group director at Ofcom, said: “With bidding in the principal stage concluded, we now move to the next stage of the auction where the operators will have an opportunity to negotiate the position of their spectrum holdings in the wider band.

“This is an important step forward in bringing better mobile services to people – wherever they live, work and travel. These airwaves will help improve coverage for the mobile services people use today, as well as supporting the UK’s position as a world leader in 5G.”

In the last set of 5G auctions, Ofcom placed limits on how much spectrum each network operator could purchase in order to maintain a competitive marketplace and not let one operator become too dominant.

Last year, Ofcom freed up spectrum in the 6GHz bands in order to allow for home routers to take advantage of the low-latency superfast speeds they can provide.

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