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Spectrum auctions 2018

Published Thursday, March 22, 2018

This briefing provides an outline to the 2018 mobile spectrum auctions conducted by Ofcom. Two new bands of radio frequency spectrum are being auctioned for mobile services. The new spectrum is expected to boost the capacity of mobile networks to support increasing consumer demand for mobile data.

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On 20 March 2018 Ofcom began auctions to allocate portions of spectrum in two frequency bands that are being newly made available for mobile services: the 2.3 GHz and 3.4 GHz bands.

The 2.3 GHz band is compatible with existing devices and so can be immediately used to deliver 4G mobile services. The auction of this band is expected to boost the capacity of the 4G network to cope with increasing consumer demand for mobile data. It is not expected to improve coverage of mobile services.

The 3.4 GHz band is not immediately useable by existing mobile devices but will be a key band for future 5G applications.

Ofcom has approved the following five companies to bid in the auction: EE, Three, O2, Vodafone and Airspan Spectrum Holdings Limited.

The reserve price for the auction (the minimum amount that will be raised) is £70 million. This comprises £40 million for the 2.3 GHz band and £30 million for the 3.4 GHz band.

Ofcom has imposed caps on the amount of spectrum that operators are able to bid for in the 2.3 GHz band, and on the total amount that bidders can acquire across both bands. The restrictions aim to address competition concerns raised by uneven distribution of spectrum between the 4 mobile network operators (EE, Vodafone, O2 and Three). The effect of the caps will be to reduce BT/EE’s and Vodafone’s overall share of the spectrum. BT/EE will not be able to bid in the 2.3 GHz auction, and can bid for only 80 MHz in the 3.4 GHz band. Vodafone will only be able to gain a maximum of 160 MHz of spectrum across both the 2.3 GHz and 3.4 GHz bands.

The auction is likely to last several weeks, the time will depend on the level of demand for the spectrum. Ofcom have published a FAQ page, What you need to know about Ofcom’s spectrum auction as well as a guide to the auction, which provides more information about how the bidding will work.

Commons Briefing papers CBP-8270

Authors: Georgina Hutton; Carl Baker

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