Off the spectrum
Ofcom is planning the largest ever single auction of additional spectrum for mobile services in the UK.
The auction will see the selloff of the equivalent to three quarters of the mobile spectrum in use today; 80 percent more than the 3G auction that took place in 2000.
Of course the spectrum is needed to meet growing mobile traffic as more people adopt smartphones and use mobile broadband data services.
Ofcom said the new spectrum will provide much needed capacity for 4G services, which are set to deliver significantly faster broadband services similar in speed to those enjoyed at home.
"The auction is not only critical to the future of the UK mobile telecommunications market but it is also of significant importance to the wider economy. It will support a wide range of data services that are fast becoming essential features of the modern world," said Ofcom's chief exec, Ed Richards.
"Our role as the independent regulator is to award this spectrum in a way that secures the best use of the spectrum for the benefit of citizens and consumers in the UK. That is why we are proposing to design the auction in a way that not only encourages investment but also promotes competition and delivers wide coverage of services," he added.
Ofcom has proposed that the auction will include a combination of safeguards and coverage conditions to promote competition and significantly widen the coverage of mobile broadband to 95 percent of the UK population.
The auction will be for 2 spectrum bands: 800Mhz and 2.6Ghz. The lower frequency is part of the spectrum freed up when analogue TVs are switched off and is perfect for widespread mobile coverage, while the 2.6GHz band is better for delivering the capacity needed to deliver higher speeds, according to Ofcom.
The regulator has been busy assessing how the new spectrum will affect future competition in the mobile market since being asked by the government in December.
It reckons there are risks to future competition if bidders are free to acquire any amount of spectrum in an open auction because access to new spectrum is scarce but essential for providing the higher speed data services demanded by consumers, such as web browsing and video streaming.
The combination of these two factors - scarcity and demand - could create incentives for bidders to bid strategically and reduce the amount of spectrum available to other bidders, it said.
Ofcom proposed introducing limits both on the minimum and maximum amounts of spectrum bidders (the 4 national wholesale operators) can win.
The auction is planned for the first quarter of 2012, depending on the results of the consultation so 4G can start being rolled out across the UK as soon as possible.
