Ofcom 5G spectrum auction starts tomorrow at £10m a pop

Ofcom has produced a guide to the upcoming auction of mobile spectrum, telling audiences that mobile networks EE, Three, O2 and Vodafone will have to pay millions to get control of these slices of the airwaves.

The reserve price has been set at £1m and £10m for each 2.3Ghz and 3.4Ghz lot.

The 5G spectrum auction will start on 20 March 2018, the telecoms regulator confirmed.

The winners will win big.

Go deeper: What’s the 5G spectrum auction all about?

Each of the UK’s major networks are setting huge store on being able to buy out parts of the mobile spectrum that haven’t been publicly available before.

Companies who control more mobile spectrum can offer new and existing customers better quality voice call signal and faster data speeds in more places in England, Wales, Scotland and Northern Ireland.

Who owns what?

EE are owned by BT. Together they hold 42% of the UK mobile spectrum.

Vodafone is in second place with 29%, Three has 15% and O2 owns the least with 14%.

What’s for sale?

The 40MHz of airwaves for sale in the 2.3GHz band is already supported by the likes of Apple and Samsung phones.

So whoever snaps up mobile spectrum here will be able to use it immediately, to offer faster downloads and stronger 4G internet connections.

By contrast, the 150MHz of spectrum for sale in the 3.4GHz band is not compatible with most current smartphones. We expect companies who buy up space in the 3.4GHz band to use it for 5G.

And indeed Ofcom themselves say the 3.4GHz band is central to the rollout of 5G mobile across Europe.

What is the mobile spectrum auction?

Ofcom is auctioning off new parts of the radio airwaves for use by commercial companies.

Spectrum in the 2.3GHz and 3.4 GHz bands will be up for sale.

News sites like ours tend to refer to the auction as “the Ofcom 5G spectrum auction” because the 3.4GHz portion of the airwaves will be incredibly useful for firms to use when 5G is available in the UK.

You can’t get 5G on any device just yet, but it is expected to be availble by late 2019 or early 2020.

How does the 5G spectrum auction work?

The auction will follow fairly traditional rules: it will take place over a number of ’rounds’, where networks confirm the ‘lot’ number of the spectrum space they want to buy.

These ‘lots’ will go up in price the more bids are laid against them, until no new bids are put forward, and the top bidder will win.

There are four lots of 10Mhz space available in the 2.3Ghz auction, with a reserve price for each lot of £10m.

In the other band, 3.4Ghz, there are 30 lots of 5Mhz space available to buy, with a reserve price of £1m.

EE, Three court controversy

Two of the UK’s largest networks played with fire by trying to delay the mobile spectrum auction.

Three were first to try and change the rules of the upcoming auction, asking for a judicial review in the High Court.

BT-owned EE also tried to put a dampener on the auction, lodging an appeal against the 37% limit Ofcom put on the amount any network could own.

What’s next?

Ofcom say the auction could take several weeks to complete. We may be into June before the first winners are announced.

We’re expecting the regulator to publish the prices each network bids for each spectrum lot when the last round of bids has come to a close.

Everyone in the industry is keeping a very close eye on proceedings, as it could tell us who will be able to sign up the most new customers for both 4G and 5G over the next five to ten years.