Pointing to recent proposed mergers among four British carriers that would reduce the number of national wireless competitors from four to three, British telecommunications regulator Ofcom released a consultation document on a planned auction of fourth-generation (4G) mobile spectrum in the 2.3 GHz and 3.4 GHz bands late this year or early next year in which Ofcom proposes to withhold 60 MHz of available spectrum for sale at a later date. Issued on Tuesday, the consultation document seeks comment on plans to auction 190 MHz of unused defense ministry spectrum that was handed over to Ofcom last year for sale to the wireless industry.
Through an initial consultation conducted last November, Ofcom confirmed its intention to sell 40 MHz in the 2.3 GHz band and 150 MHz in the 3.4 GHz band through a single multi-round ascending auction process. In Tuesday’s document, Ofcom changed its initial proposal to sell all available licenses in 5 MHz blocks and stated instead that it would sell the 3.4 GHz band licenses in 5 MHz blocks and the 2.3 GHz licenses in 10 MHz allotments.
With reserve prices per 5 MHz increment of between £2.5 million-£5 million (US$3.8 million-$7.7 million) in the 2.3 GHz band and £1 million (US$1.5 million) in the 3.4 GHz band, the United Kingdom is expected to raise between £50 million and £70 million (US$76.7 million-$1.07 billion) through the sale. However, as it requested feedback on the impact on marketplace changes since November that include British Telecom’s proposed acquisition of Everything Everywhere and the proposed merger of national wireless carriers O2 and Three, Ofcom said it is considering a 60 MHz holdback “to secure the optimum use of spectrum.” Citing “a number of uncertainties” associated with both transactions, Ofcom (which has no role in approving either merger) noted that the withheld frequencies could be used to encourage the market entry of a new competitor or to “address concerns about overly concentrated holdings.” The consultation period ends on June 26.