05 April 2018
| James Pearce
UK mobile operators have splashed out more than £1.4 billion on 5G spectrum as regulator Ofcom unveiled the results of its latest spectrum auction.
All four of the UK’s major mobile operators
successfully bid for new spectrum that will be able to support
5G services as
the auction surpassed expected revenue.
Philip Marnick, Spectrum Group Director at Ofcom: "This is
good news for everyone who uses their mobile phone to access
the internet. As a nation we’re using ever more
mobile data on smartphones and mobile devices.
"Releasing these airwaves will make it quicker and easier to
get online on the move. It will also allow companies to prepare
for 5G mobile, paving the way for a range of smart, connected
Telefonica subsidiary O2 was the biggest spender overall,
splashing out £317.7 million for 40MHz of 3.4GHz spectrum
– which is seen as a key band for 5G deployments
– and £205 million to scoop up all 40MHz of
available 2.3GHz spectrum, taking its total spend to
It follows a
report from the mobile operator that claimed 5G
infrastructure can generate as much as £6 billion in
productivity savings for the UK economy.
Telefónica UK CEO, Mark Evans said: "We have been
setting the standard for loyalty and customer service in our
sector. With this spectrum investment we can build on our
publicly recognised Best Network Coverage, to lead the way on
network reliability and service as well. The real winners in
this auction are customers as O2 invests to further strengthen
its award winning network. The airwaves we've secured allow us
to further enhance our network, both now and in the future.
"We've thrown down a major marker for our future commitment
to the UK. Our investment in 3.4GHz enables us to move forward
to further improve connectivity whilst boosting the economy and
laying the foundations for 5G in Britain"
Vodafone UK was the biggest single spender on 5G spectrum,
bagging 50MHz of 3.4GHz spectrum at a cost of £378
million, while BT-owned EE spent £302 million on 40MHz of
3.4GHz of spectrum.
CK Hutchison’s Three UK bid £151 million
for 20MHz 3.4GHz spectrum although it already has some 3.4GHz
spectrum following its acquisition of UK broadband provider
Relish last year.
Five companies took part but Airspan Spectrum Holdings
– a small cell LTE and backhaul vendor backed by
technology giant SoftBank – failed to win any
Marc Allera (pictured), CEO of
BT’s Consumer Division, said: "The acquisition of
40MHz of 3.4GHz spectrum positions us well for our launch of
future 5G services and consolidates our position as one of the
world’s leading providers of communications
"With this outcome, we’ll continue to roll out
the fastest 4G service to consumers and businesses across the
UK, and now look ahead to the potential new services that 5G
will offer, keeping our nation at the forefront of digital
The auction followed a long-running dispute across the
industry over spectrum holdings which saw Three launch a media
campaign in an attempt to curb the amount of spectrum that can
be held by any one company. According to the Hutchison opco, BT
and EE combined owned 45% of available UK spectrum prior to the
The auction began on 20 March after legal action from Three
and BT over Ofcom’s rules. Ofcom had originally
said the auction would take place in April after the
Court of Appeal in London rejected a bid by Three to force
a 30% spectrum cap to be imposed on any bidder.
Ofcom has imposed a total cap of 37% on how much any one
operator may hold at the end of the auction, a move opposed by
BT, which owns EE, today the largest spectrum holder with 45%.
BT last year went to court to try to block any move for a cap,
but lost its attempt in December.
At the same time the High Court told Three it was wrong to
ask for a 30% cap – and that decision was held up by
the February Court of Appeal decision.
The 3.4GHz band in particular is seen as a key spectrum band
for 5G rollouts as it allows operators to add extra capacity to
existing sites without the need to roll out a high number of
According to Bengt Nordstrom, the CEO of telecoms
consultancy Northstream, the fact that operators paid "higher
than expected" amounts for the spectrum could have a negative
impact on consumer experience as it may impact further
investments in 5G infrastructure.
He said: "The results of the auction confirm our view that
the mobile industry has passed the stage where we should expect
new entrants in national markets to build and launch new mobile
networks that compete with the incumbents. This in turn makes
the idea of a competitive spectrum auction even more strange.
It was a given that the UK’s four incumbent
operators would win the 5G licences - therefore why would Ofcom
drive up the prices?"
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