Ofcom has announced plans to auction off spectrum previously owned by the Ministry of Defence in early 2016.
The spectrum sits in the 2.3GHz and 3.4GHz bands and is ideally suited to mobile broadband 4G services. Vodafone and EE use the 2.6GHz band to deliver some of their 4G services.
A total of 190MHz of spectrum is up for grabs, which Ofcom said is three-quarters of that released in the 2013 spectrum auctions, so it will no doubt be of interest to the mobile operators.
The 2.3GHz band is likely to prove the most attractive as it is compatible with existing handsets, including the iPhone 6, HTC Desire and Galaxy devices from Samsung. This holding will be auctioned in 10MHz blocks. The 3.4GHz band will be auctioned off in 5MHz chunks.
A reserve price of £70m has been set for the holdings, although the government will of course hope it far exceeds this reserve. The 2013 auctions raised £2.3bn, although this was below the £3.2bn the government had expected.
Philip Marnick, Ofcom spectrum group director, explained that releasing the holdings for commercial use is vital in helping to keep the UK’s digital economy ticking.
“This auction is an important step in ensuring that the UK has the wireless capability to deliver and support new technology,” he said.
“We’re responding to rapid change and innovation in the communications sector, which is placing greater demands on spectrum. Part of our plan to meet this demand is by making new spectrum available and allowing it to be used in a number of different ways.”
The launch of the spectrum will be welcomed, but it comes almost five years after plans to release it for commercial use were mooted, underlining how long it can take for complex technical plans to work their way through government.
Operators, too, may not be as keen to splash out on spectrum this time round, as they now face the prospect of markedly higher spectrum licence fees with three of the operators tied-up in merger and acquisition deals.
However, given the huge demand for mobile services in the consumer and business markets most operators may well feel they have no choice but to grab as much spectrum as they can afford.
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