Ofcom has won its court battle to start a 5G spectrum auction in the UK, and so the word spectrum is suddenly everywhere. But what will Ofcom’s auction mean for the likes of us?
Before discussing the auction and its possible impact, it is first necessary to go into what exactly spectrum release is, and why it’s so important.
In July 2017 Ofcom limited to a maximum 37% the amount of wireless spectrum any one company could own.
Mobile networks weren’t happy with this move.
Both the BT-owned EE and Three took cases to the High Court to try to force Ofcom to back away from this limit.
Who owns what?
Currently, BT/EE owns 42% of the mobile spectrum, Vodafone has 29%, Three owns 15% and O2 has the least at just 14%.
The more spectrum a company has exclusive access to, the better quality of calls and data availability it has. Because EE holds the most, it can offer customers the fastest 4G in the largest number of areas in the UK.
As we reported earlier this year, Three has been calling for a much lower limit on the amount of spectrum any mobile network can own – just 30% – because it lost out so badly when the 4G spectrum was auctioned off in 2013.
Go deeper: EE wade into 5G court battle
What is spectrum?
Spectrum refers to the radio frequencies which are allocated for communication over the airwaves.
Mobile radio signals travel via radio frequencies, or spectrum, and it is therefore necessary for mobile operators who need to transmit signals wirelessly.
Mobile providers are often calling for regulators to release additional spectrum.
In both capacity and coverage bands, more spectrum gives EE, O2, Vodafone or Three faster connections and better service for their customers.
Who regulates the spectrum?
As a sovereign asset, spectrum is regulated by the government of each country, or the national regulatory authority charged with overseeing the use of the airwaves.
This regulation causes some frustration within the mobile industry as it can mean the release of additional spectrum can take longer than big companies think it should.
This is often due to the need for international, nationwide, and regional agreement on the assignment of future spectrum bands. There is also the need for manufacturers to create devices capable of working within new frequency bands.
It is, therefore, exciting news for many that Ofcom will be auctioning off spectrum space, but what exactly does this mean? And what are the limits on companies who intend to purchase spectrum space?
The Ofcom auction
The main purpose of this auction is to help providers prepare for the coming introduction of 5G.
Although it is still several years away from being made commercial available, the knowledge that 5G is on its way means that the industry needs to be ready for its arrival.
The initial auction sees 190MHz of spectrum in the 2.3GHz and 3.4GHz bands combined. This will not be evenly split, with 40MHz being made available in the 2.3GHz band, while the other 150MHz will be for the 3.4GHz band.
This amounts to nearly three-quarters of the spectrum released at Ofcom’s last auction way back in 2013.
There is another spectrum auction planned at a later date, which will see 116MHz of spectrum auctioned off in bandwidth that is higher still, 3.6GHz to 3.8GHZ and in the 700MHz band.
Not science fiction: Vodafone really are building a 4G network on the Moon
By 2020, the government intends to have freed up some 500MHz of spectrum space for civilian use, by either releasing or sharing the space.
This initiative has led to this new spectrum space being made available, having been released by the Ministry of Defence.
This isn’t the first time 3.4GHz spectrum has been made available, some is owned by Three after the company acquired UK Broadband and Three have been very much in the conversation in the lead up to the auction.
In the run up to the auction, EE, under BT’s ownership, challenged the decision, claiming that a cap put on providers was unfair, while Three said that they cap did not go far enough.
It should be pointed out that as a smaller company, Three would benefit from a higher cap, while it would be contrary to BT’s best interests.
The case was dismissed in the High Court, Three stated their displeasure at the decision, while an Ofcom spokesman said: “We believe the High Court judgment is clear and Three’s actions may further delay the auction, which is not in the interests of the UK.”
Rules and caps
In the rules set out on their website, Ofcom cap “immediately usable” spectrum at 255MHz, which means that BT/EE will be unable to bid for any spectrum in the 2.3GHz band due to already being at the limit of this cap.
The above cap was first mentioned in November, but another was announced later, stating that an additional cap of 340MHz will be put on the overall amount of spectrum purchased by a single operator.
BT/EE will only be able to win 85MHz of new 3.4GHz band spectrum in the auction, while Vodafone are limited to 160MHz across both the 2.3GHz and 3.4GHz bands.
No other bidder will be restricted if their current spectrum holdings stay as they are.
What does this all mean?
Truth be told, the difference will not be immediately noticeable for most customers.
Until the introduction of 5G, not much will change, especially as there is only a small amount of immediately usable spectrum being released as part of the auction.
When 5G does become a reality, the caps should ensure that all operators get their share of the necessary spectrum to accommodate the technology, so unless something major changes, it should be all good news for customers, who have 5G to look forward to in the relatively near future.