The telecoms regulator Ofcom has issued revised proposals for the upcoming 4G spectrum auction, in a move that may end delays to the rollout of fast mobile broadband.
Ofcom has presented new proposals that could clear the way for the UK's much-delayed 4G spectrum auction.
A key change in the
new proposals, published on Thursday, is the scrapping of previous plans to reserve a
chunk of 800MHz spectrum for Everything Everywhere — something
that had irked rivals O2 and Vodafone. The auction, set to take place
at the end of this year, will contain spectrum in both the 800MHz and
Everything Everywhere has responded to Ofcom's new move by saying
the regulator is "missing a huge opportunity for the UK".
Ofcom has also made new suggestions for ensuring that mobile
broadband coverage extends to more of the UK population, particularly
in rural areas. The regulator previously suggested obliging one of the
800MHz spectrum recipients to build a network that serves 95 percent
of the population. However, it now wants to link this obligation to a
separate government funding scheme, which aims to reach as much as 99-percent coverage.
"This is a crucial step in preparing for the most significant
spectrum release in the UK for many years," Ofcom chief Ed Richards
said in a statement. "The proposals published today will influence the
provision of services to consumers for the next decade and
The distribution of sub-1GHz spectrum, which includes both the
soon-to-be-licensed 800MHz spectrum and the 900MHz spectrum that
Vodafone and O2 already use for 2G or GSM services, has been a crucial
sticking point in negotiations between the regulator and operators.
Threats of litigation from unspecified operators led
Richards to decry in November what he called a "gaming
of the system". These wranglings have caused repeated delays in the
auction process, leaving the UK behind as the rest of the world rolls
out 4G services, as well as infuriating the
As 2G or GSM spectrum can be 'refarmed' to deliver mobile broadband
services, much of this argument has to do with which kinds of spectrum
the different operators already hold. There are two types: 1800MHz
spectrum, which is better at carrying high-bandwidth services, and
900MHz spectrum, which is better at travelling over long distances and
providing indoor coverage.
Everything Everywhere, which operates the T-Mobile UK and Orange UK
brands, has its 2G spectrum in the 1800MHz band, while rivals O2 and
Vodafone have 900MHz spectrum.
The 2.6GHz spectrum in the 4G auction is even worse at
propagating over long distances and penetrating buildings than the 1800MHz
spectrum. Because of this, Ofcom's
previous proposals in March included the setting-aside of 2 x 5MHz
of sub-1GHz spectrum for Everything Everywhere.
The point was to make sure there would be at least four major
operators capable of wholesaling viable, long-range 4G connectivity to
smaller providers such as Virgin Mobile; Three or another
new entrant would also have to be allocated sub-1GHz spectrum.
However, rivals may have seen this as Ofcom favouring Everything
Everywhere, making it likely that this was a key sticking point in
last year's negotiations.
Ofcom's change of heart
Ofcom has now had a change of heart, following further analysis
and the responses it received to the March proposals. Due to the merger of
T-Mobile and Orange, Everything Everywhere has a huge amount of
1800MHz spectrum, and Ofcom has decided that this type of spectrum is
not so limiting after all.
The proposals published today will influence the provision of services to consumers for the next decade and beyond.– Ed Richards, Ofcom
"We now believe that the technical advantages of sub-1GHz spectrum
are less clear and that the large quantity (2 x 45MHz) of 1800MHz
spectrum which Everything Everywhere holds is likely to mean that
there is only a fairly small gap between what Everything Everywhere
and the holders of 800MHz spectrum could deliver," Ofcom said in its
new proposal summary.
"In many locations, a network with a sufficiently large amount of
1800MHz spectrum coupled with a large network of base stations could
match or even better the quality of a network with a smaller amount of
800MHz spectrum, even if it is unlikely to be able to do this in the
hardest-to-serve locations," the regulator explained.
Clearing the way at auction
According to Ovum analyst Matthew Howett, this reversal should
clear some of the way towards holding the 4G auction.
"The feeling was that Ofcom's March position was too favourable to
Everything Everywhere. Ofcom has tried to redress that balance and has
made it slightly less favourable for some operators and more so for
others," Howett told ZDNet UK.
Howett added that the assurances Ofcom made this week, saying it remains
open to suggestions on the issue of annual 4G spectrum licence fees,
will also allay some of O2 and Vodafone's concerns.
Ofcom said on Thursday that, although O2 and Vodafone
had been unhappy at Everything Everywhere's reserved spectrum, the
regulator had not changed its mind just to clear the deadlock.
"We've come up with a set of refined proposals based on the new
analysis we've carried out. I wouldn't say it's just because of the
threat of pending litigation that we've done that," an Ofcom spokesman told
Everything Everywhere response
As for Everything Everywhere itself, the operator reacted
critically to Ofcom's announcement.
"Everything Everywhere is very disappointed to see...
...that Ofcom has again reversed its proposal to ensure all mobile operators hold a
minimum amount of sub-1GHz spectrum," the operator said. "Ofcom is
missing a huge opportunity for the UK to address the imbalance in
sub-1GHz spectrum holdings, which has damaged consumer interests for
the last 20 years — and is a situation which is now threatening
The 2 x 45MHz spectrum measurement quoted by Ofcom represents
what Everything Everywhere will hold in 1800MHz once it has sold off a
further 2 x 15MHz — a condition of the European Commission's
approval of the T-Mobile-Orange merger. Given that the UK more-or-less gave that
spectrum to Everything Everywhere in the first place, the operator has
promised to reinvest
the proceeds of the sale into its UK network.
The Financial Timesreported
on Tuesday that Everything Everywhere's sale will kick off within the next month, with
the proceeds expected to total up to £400m.
Three currently has no 2G spectrum at all, as it only began
operations in the era of 3G. According to Howett, if Three picked up
some of Everything Everywhere's 1800MHz spectrum at auction, that
might remove the need for Ofcom to reserve any sub-1GHz spectrum at all.
"If Three recognise the nice balance 1800MHz offers [between
bandwidth and range] and tries to acquire some from Everything
Everywhere's divestiture, then Ofcom may think again," Howett
Ofcom's spokesman confirmed to ZDNet UK that this would indeed be
Ofcom is missing a huge opportunity for the UK to address the imbalance in sub-1GHz spectrum holdings, which has damaged consumer interests for the last 20 years.– Everything Everywhere
Ofcom has now decided the 98-percent target is is a good idea. However, its
proposal for reaching this goal means people in hard-to-reach places who end up getting mobile broadband coverage for the first time will most likely have no choice of
The regulator's decision to extend the coverage obligation is
closely tied to the government's announcement in October of a £150m
fund for new mobile masts in areas that currently lack even mobile
voice services. This government plan aims to provide around 99 percent
of viable voice coverage across the UK. This level of coverage
already exists, but only if areas of very poor reception are counted.
According to Ofcom, the revised obligation will have the broadband provider match the expanded voice coverage. There are two ways to
achieve this: the operator could itself participate in the government
voice rollout, or it could install its own 4G kit on new masts rolled
out by other operators as part of that scheme.
It is not clear whether the operators participating in
the voice coverage scheme would have to allow this sort of
piggy-backing. This could be clarified, however, as the Department for Culture, Media and Sport (DCMS) launched a consultation on
Thursday that asks the mobile industry what it would like the
specifics of the scheme to be.
Ofcom acknowledged that, either way, the operator with the mobile
broadband coverage obligation would probably be the only choice of
operator for people receiving such coverage for the first time.
The regulator considered and rejected two options that could have
changed this. It looked at forcing every 800MHz licence holder to
match the newly-expanded voice coverage footprint. However, it decided this would probably lead to wasteful duplication of masts, unless the
new infrastructure is capable of accommodating every licence holder, which is far from guaranteed.
Ofcom also considered forcing the one operator under the obligation
to offer wholesale 4G access to its rivals. However, it said this
would be overly complicated and costly, and might make operators less
like to bid for that licence.
Get the latest technology news and analysis, blogs and reviews
delivered directly to your inbox with ZDNet UK's