16 April 2018
| Natalie Bannerman
Ofcom has published the results of its 5G spectrum auction with O2 coming out on top and Three UK having spent the most.
Unsurprisingly the winning bidders include:
EE Limited, Hutchison 3G UK Limited,
Telefónica UK Limited (which owns O2) and Vodafone
At first glance O2 seems to come out on top, having secured
spectrum in the 2350 – 2390MHz range, the crucial for
the deployment of 4G services for
£205,896,000. In addition the company
also won spectrum required for 5G in the 3500 –
3540MHz range for £317,720,000.
"O2 emerged as the big winner, sweeping up all of the
crucial 2.3GHz airwaves that can immediately offer much-needed
4G capacity, commented Kester Mann, principle analyst of
operators at CCS Insight. "As the most spectrum-constrained
operator, this sale was more crucial to O2 than any of its
rivals and the result gives it the certainty to continue its
mobile-centric strategy in the UK market. It will also give
parent Telefonica some clarity over its intended IPO for the
Overall, Vodafone spent the most amount of money for 5G
spectrum alone, winning 3410 – 3460MHz license for a
total of £378,240,000. In a statement
Vodafone said it would use the spectrum to "deploy 5G services,
enabling Gigabit speeds and lower latency to enhance
applications including connected vehicles and robotics,
industrial automated systems, and virtual and augmented
"Vodafone will also be satisfied with the outcome, spending
the most on 5G spectrum," added Mann. "This re-enforces its
renewed long-term commitment to the UK market following several
years in the doldrums. It still has plenty to do to turn its
fortunes around, but today’s news will boost
long-term efforts to regain lost momentum.
EE spent a modest £303,594,000 at a
small additional cost of £1,002,000 in
order to outbid O2 for its spot in the top 3540 –
"EE’s strong spectrum position meant that it
was unable to bid for the 4G airwaves. Its spend on 5G spectrum
will support a strategy to launch commercial services in 2020,"
continued Mann. "EE appears well-positioned to be among
Europe’s pacesetters in 5G, backed by an already
well-established 4G network."
Three’s Hutchison 3G UK Limited, appears to
have suffered the most having spent an additional
£13,133,000 to win spectrum in the
prominent 3460 – 3480MHz range. Telecoms.com
is reporting that it was a bidding war between Vodafone and
Three, that resulted in the extra spend, even going far as to
implying that Vodafone drove up the price for fun.
"The outcome for Three will do little to improve its
precarious market position," explained Mann. "Having campaigned
tirelessly for more favourable conditions, it was surprising
not to see it spend more. It will be particularly disappointed
to miss out on the vital 4G airwaves to support its data-hungry
customers. Three remains sub-scale and without fixed-line
assets in a market gradually moving towards multiplay services
and today’s outcome will do little to dampen
doubts over its long-term future."
Ofcom say that there were no withdrawn lot licenses during
the process, though back in March,
Connexin Limited, the UK fixed wireless company, pulled out of
the spectrum auction just days before principle stage of the
auction was due to begin.
"The overall spend at nearly £1.4 billion was higher
than expected and reflects a hugely competitive sale, with the
frequencies vital to helping formulate each network
operator’s long-term strategy. Attention now moves
to the 700MHz sale – another 5G band that is vital for
wide-area coverage – that could be auctioned in the UK
as soon as next year," said Mann.
Hutchison 3G UK Limited,
Telefónica UK Limited,