UK regulator Ofcom has confirmed plans for a new spectrum auction in spring 2020. The auction will include 80 MHz in the 700 MHz band and 120 MHz in the 3.6-3.8 GHz band to support the expansion of 5G services in the UK. Ofcom has notably dropped an earlier proposal for coverage obligations in the spectrum licences, after the British operators agreed to cooperate on improving rural coverage.
The auction proposal is subject to public consultation until 09 December, and Ofcom said it plans to finalise the details in early 2020.
Two bidding rounds
The auction will take the ‘simultaneous multiple round ascending’ approach, similar to the 2018 spectrum auction. This means bidding in the first round for certain amounts of spectrum, and a second stage of bidding to determine the specific frequencies that winning bidders will be allocated.
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 said.
In total, six lots of 2x5MHz in the 700 MHz band will be available, with a reserve price in the proposed range of GBP 100-240 million per lot. An additional four lots of 5 MHz of 700 MHz downlink-only spectrum will be offered, starting at GBP 1 million per lot. In the higher range, 24 lots of 5 MHz of 3.6-3.8 GHz spectrum will be sold at a proposed reserve price of GBP 15-25 million per lot.
No coverage obligations, spectrum cap remains
The regulator consulted late last year already on the spectrum auction plans. It had originally expected to include coverage obligations with the licences, but said it no longer sees these as necessary after the operators agreed to set up a shared rural network to improve coverage.
The overall spectrum cap of 37 percent per operator remains part of the regulator's proposals for the auction. This means BT/EE can acquire a maximum 120 MHz in the auction, 3 UK 185 MHz and Vodafone UK 190 MHz. The cap does not apply to O2 UK due to its current limited holdings.
