The UK telecoms regulator Ofcom has revised its plans for 4G spectrum auctions in such a way that it envisages will result in 98pc of the UK’s population served with 4G mobile spectrum. Spectrum auctions will take place in Q4 of this year.
Ofcom says demand for mobile data in Western Europe is estimated to increase by more than 500pc over the next five years, fuelled by smartphones and mobile broadband data services, such as video streaming, email, messenger services, online mapping and social networking.
As the UK switches from analogue to more efficient digital TV, new spectrum capacity is becoming available to meet this demand. This ‘digital dividend’ uses airwaves in the 800MHz band, which will be auctioned along with higher frequency airwaves in the 2.6GHz band at the end of 2012. This will be equivalent to three quarters of the mobile spectrum in use today.
Originally, Ofcom planned for a special condition to be attached to the 800Mhz band licence to cover 95pc of the UK with a 4G network. However, following consultations throughout 2011 it has decided that a special condition should be attached to the 800MHz licence requiring the holder to cover 98pc of the population.
Ofcom now believes the special condition it previously proposed can be strengthened in one of two ways, it said today.
Stakeholders are being given 10 weeks to comment on Ofcom’s revised proposals.
A final decision on the auction design will be made in summer 2012, with the auctions set to begin in Q4 2012.
The first option is to increase the obligation to 98pc of the UK by population. However, the second and potentially more effective option, is to require that one 800MHz operator provides 4G coverage that not only matches existing 2G coverage but also extends into mobile ‘not spot’ areas of the UK where the stg£150m will provide infrastructure capable of supporting 4G coverage.
This may have the potential to extend 4G mobile coverage even further than 98pc of the UK by population.
Also, this second option would make it more likely that mobile broadband services would be provided in locations where they could be most valued by consumers, rather than in those areas where it is easiest for a licensee to meet the obligation.
Emphasis on spectrum quality
Ofcom said it believes consumers are going to receive better services at lower prices in the future if there are at least four national wholesalers of mobile services. Without the right quality and mix of spectrum, an operator might struggle to compete with other national wholesale providers.
Ofcom is also proposing to reserve some spectrum in the 2.6GHz band to be shared by a group of companies to deliver innovative new mobile services for consumers. Potential applications include local mobile networks for student campuses, hospitals or commercial offices, which operate on short-range frequencies serving a small area.
“This is a crucial step in preparing for the most significant spectrum release in the UK for many years," said Ed Richards, Ofcom chief executive.
“The proposals published today will influence the provision of services to consumers for the next decade and beyond.
“The UK benefits from being one of the most competitive mobile phone markets in Europe. This means that consumers pay less for mobile communications services and have the choice to shop around for packages that suit them best. As the UK enters a new generation of mobile communications, Ofcom’s objective is to promote effective competition and to stimulate both investment and innovation.
“In addition, we are proposing a significant enhancement of mobile broadband, extending 4G coverage beyond levels of existing 2G coverage – helping to serve many areas of the UK that have traditionally been underserved by network coverage," Richards said.