Ofcom, the government-approved regulatory authority for broadcasting in the UK, last week set out a number of new proposals for making 4G mobile spectrum available to at least 98% of the UK population. These new proposals are to be put in place in time for the UK spectrum auction which is to be held at the end of the year.
According to Ofcom, demand for mobile data in Western Europe is estimated to increase by more than 500% over the next five years. As the UK switches from analogue to more efficient digital TV, new spectrum capacity is becoming available to meet this demand. This ‘digital dividend’ uses airwaves in the 800MHz band, which will be auctioned along with higher frequency airwaves in the 2.6GHz band at the end of 2012. This will be equivalent to three quarters of the mobile spectrum in use today, says Ofcom.
Ofcom recently consulted on its assessment of how 4G spectrum is likely to affect future competition in mobile electronic communications services markets. Vodafone (London) and O2, which is owned by Telefonica (Madrid, Spain), have previously opposed to an auction that would favor the larger operators. In response, Ofcom said it would not reserve crucial spectrum for market leaders, but instead outlined a number of proposals for how the spectrum should be auctioned to promote competition in those markets.
One proposal is to give a special condition to one of the 800MHz licenses, obliging the holder to roll out a 4G network to 95% of the UK population. In October, the Government announced plans to invest $192 million to boost mobile coverage in those areas with poor or no mobile service. A significant part of this money is likely to be spent on building new mobile infrastructure in areas of the UK where there is little or no commercial incentive for operators to do so. Ofcom now believes that the special condition it previously proposed can be strengthened in one of two ways.
The first option is to increase the obligation to 98% of the UK by population. The second option is to require that one 800MHz operator provides 4G coverage that not only matches existing 2G coverage but also extends into mobile ‘not spot’ areas of the UK where the $192 million will provide infrastructure capable of supporting 4G coverage. This may have the potential to extend 4G mobile coverage even further than 98% of the UK by population.
The regulatory authority also said that it will vary amounts of spectrum in the upcoming auction so that at least four operators have sufficient spectrum “to be credible national wholesalers of future mobile services.” Ofcom will also reserve spectrum in the 2.6GHz band to be used by companies to deliver new mobile services on short-range frequencies. According to Ofcom these companies would be local mobile networks for universities, hospitals or commercial offices.
Ofcom is giving stakeholders 10 weeks to comment on the proposals. A final decision on the auction design will be made in the summer of 2012. The auction itself will follow a few months later, starting in Q4 2012.