Ofcom raises $1.9b in 4G, 5G auction

telecomasia.net

UK regulator Ofcom has raised £1.35 billion ($1.89 billion) through an auction of spectrum in the 2.3-GHz and 3.4-GHz frequency bands.

The auction of 34 lots of spectrum across the two bands was intended to improve the capacity of existing 4G networks via the 2.3-GHz band and allow operators to prepare for the arrival of 5G by acquiring 3.4-GHz spectrum.

Telefonica UK, operator of the O2 brand, acquired all 40 Hz of the 2.3-GHz spectrum put on the block for nearly £205.9 million, and a further 30 MHz of 3.4-GHz spectrum for an additional £317.72 million.

“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,” CCS Insight principal analyst for operators Kester Mann said. “It will also give parent Telefonica some clarity over its intended IPO for the network.”

Vodafone meanwhile won 50 MHz of 3.4-GHz spectrum for £378.24 million, while Everything Everywhere secured 40 MHz in the band for £302.59 million and Hutchison 3G UK, operator of the Three brand, acquired 20 MHz for £151.29 million.

“The outcome for Three will do little to improve its precarious market position. Having campaigned tirelessly for more favorable conditions, it was surprising not to see it spend more,” Mann said.

“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.”

Mobile broadband provider Airspan Spectrum Holdings failed to secure spectrum in either band.

Ofcom now plans to move on to the assignment stage, whereby auction winners will bid to determine the location of their new spectrum within the 3.4-GHz frequency band. Licenses will be awarded within days of the completion of this stage.

“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,” Mann concluded.

“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.”

 

 

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