Ofcom to auction tranche of MoD-owned spectrum

Communications regulator Ofcom has moved a step closer to releasing a tranche of spectrum currently owned by the Ministry of Defence (MoD) after inviting interested parties to submit bids for an auction process.

The government is looking to sell off a substantial amount of public sector spectrum for civil use, as demand for mobile services continues to rise.

"It comes in response to the fast pace of change and innovation taking place in the communications sector, which is placing increased demands on how spectrum is used by all industries," said Ofcom spectrum group director Philip Marnick.

"One important way of meeting this demand is making new spectrum available and its use as flexible as possible."

Set to take place in late 2015 or early 2016, the auction will see 190MHz of spectrum in the 2.3GHz and 3.4GHz spectrum go under the hammer.

High frequency GHz spectrum is particularly well-suited to providing faster network speeds and greater overall capacity, and as such is sought after by mobile network operators (MNOs) for use in 4G services.

At the end of October 2014, EE launched its LTE advanced 4G network in London, using 20MHz of 2.6GHz spectrum for that purpose.

The 2.3GHz spectrum the MoD is looking to divest is already compatible with many best-selling handsets, including the Samsung Galaxy and iPhone 5, and is used for 4G mobile broadband in Australia, China and India.

Meanwhile, the 3.4GHz band is being used for 4G wireless broadband in Canada and Spain, and in London by UKBroadband’s wireless broadband offering, Relish.

The MoD had previously temporarily freed up some of the spectrum it owns for use in the London 2012 Olympics.

Ofcom said the total amount of spectrum up for grabs was equivalent to three quarters of what it sold off in 2013 in a much delayed and controversial process that raised £2.3bn.

It said the auction was designed to be “fair and transparent” and so the spectrum could be awarded to those proposing to use it in the best interests of consumers.

Currently, it is proposing to split the spectrum into 38 lots of 5MHz apiece, with bidders able to bid for four lots per band minimum. It has set a reserve price of £2.5m to £5m per lot in the 2.3GHz spectrum, and £1m per lot for the 3.5GHz spectrum.

In a bid to encourage competition, Ofcom will also implement a safeguard cap to limit MNO’s mobile spectrum holdings to 37% of relevant spectrum. This would include the newly auctioned spectrum.