21 November 2016
| James Pearce
UK regulator Ofcom has set out new rules for an upcoming £70 million spectrum auction that includes a cap on “immediately usable” spectrum any operator can buy, which will prevent BT/EE from bidding on some bands.
Next year, the regulator will auction 190MHz of spectrum
across the 2.3GHz and 3.4GHz bands, adding around a third to
the mobile spectrum currently available in the UK.
Under the proposals released today (21 November), Ofcom will
introduce a spectrum cap of 255MHz that any one operator can
Philip Marnick, Ofcom spectrum group director, said:
"Spectrum is the essential resource that fuels the
UK’s economy. This auction can help ensure that UK
consumers can access the mobile data services they need, and
that operators can continue to innovate and build for the
"The UK has long benefitted from strong mobile competition.
We are designing the auction to ensure everyone benefits from a
market that continues to innovate and serve them well."
Based on current spectrum holders, only BT/EE would be
restricted from bidding on any spectrum, as it currently holds
a 45% share of immediately useable spectrum. Vodafone holds
28%, O2 holds 15% and Three holds 12%.
The cap will only apply to the 2.3GHz band, as the 3.4GHz
band is not classed as "immediately useable", and could play a
role in the development of 5G services.
EE CEO Marc Allera said the telco, which was bought by BT in
a £12.5 billion deal in January, disagreed with
Ofcom’s decision over the cap.
"While we don't agree that competition measures should be
introduced for this auction, we will now examine
Ofcom’s detailed proposal carefully and respond to
"We are unique in our ambition to expand 4G coverage to 95%
of the UK’s landmass by 2020, further than any
other UK network has done, and will continue to use our
spectrum and network to ensure UK consumers benefit from being
at mobile technology’s leading edge."
With the auction, Ofcom has set a reserve price of £10
million per 10MHz lots of the 2.3GHz band, and £1 million
for a 5MHz block of the 3.4GHz band. This means the auction has
a total reserve price of £70 million.
Ofcom’s decision has come under fire from
Three, who campaigned for the regulator to impose a cap, but
claims it does not go far.
Three CEO Dave Dyson, who saw a merger of his company with
O2 UK blocked by Brussels earlier this year following
opposition from Ofcom, argued that the current spectrum holding
in the UK "puts consumers at risk". He has repeatedly called
for Ofcom to impose a 30% cap on total spectrum ownership.
"Ofcom exists to promote competition and protect consumers
but it has once again shown it is not willing to make the big
decisions needed to deliver the best outcome for the UK," he
"It has allowed BT and Vodafone to stockpile valuable mobile
airwaves and put genuine choice for consumers at risk. It made
empty promises to the European Commission that it would tackle
this issue but it doesn’t have the courage to do
"The mobile industry is failing customers and Ofcom has
showed it has no interest in addressing that. A 30% cap on
total spectrum ownership and a spectrum reservation for smaller
operators are the only measures that will preserve competition
for the benefit of UK mobile consumers."