Consumers using their phones likely have little idea of the fierce battles mobile companies undertake to provide their handsets with better reception than their competitors. Consumers would be further surprised to find out that Ofcom polices the amount of spectrum each operator has to prevent one company moving towards a monopoly or dominant position.
EE, the mobile operator owned by BT, was in danger of moving towards such a position before Ofcom placed a block on any further EE bids for spectrum in the current 2.3GHz band used for 4G, as well as a limit on the total amount of spectrum an operator can hold after the auction. On 5 April 2018, Ofcom announced the results of the latest auction, which included a 3.4GHz bandwidth to be used for 5G.
The real news from the auction was the resurgence of O2, which used Ofcom’s blocks on EE to win all the 2.3GHz bandwidth available. O2 then also matched EE’s allocation of the new 3.4GHz band to ensure parity, whilst Vodafone bought the most of the 3.4GHz band. O2 no doubt hopes its investment will allay fears that its parent company Telefonica was no longer interested in the UK market after the blocked sale of O2 to Three in 2016 by the EU Commission.
A further auction for the 5G capable 700MHz is expected next year. One thing is certain, although Ofcom’s actions have likely protected competition, the 5G auction has raised only £1.35bn so far, significantly less than the £22.5bn raised by the 3G auction in 2001. Consumers are likely better off, but Government coffers certainly aren’t.