Britain Braced for 4G Fight
Either way, it's going to be a big fight.
When the bidding finally starts early next year, the auction will be the country's biggest ever spectrum sale, with 250MHz of spectrum available in the 800MHz and 2.6GHz frequency bands.
It will also arguably be the country's most infamous auction for all the delays the process has endured, thanks to various legal threats from mobile operators. (See A 4G Pig's Ear.)
And Ofcom's announcement today doesn't necessarily eliminate the potential for lawsuits.
Shaun Collins, CEO at CCS Insight , described Ofcom's proposal as a "tweak" rather than a "wholesale restructuring" of the auction design. And given that, he said, "I wonder if we won't get the same backlash from the same operators as last time." (See Ofcom Tweaks LTE Spectrum Proposals.)
But the regulator appears to be ready for a legal fight, if operators chose to litigate.
Ofcom published more than 500 pages in today's consultation document. According to Ovum Ltd. 's Matthew Howett, there's not a material difference from what Ofcom produced in January, but the majority of pages are made up of them justifying their proposals. "If there is a legal challenge, they know they'll come out on top," he said.
So what's new?
The changes Ofcom has introduced, while seemingly slight, will have a big effect on how much of the valuable 800MHz spectrum each of the U.K.'s four mobile operators will be able to get. This spectrum's value lies in its lower frequency range, which has better propagation qualities; and that means operators would need to deploy fewer base stations to cover wider areas, compared to using higher frequency spectrum.
Ofcom has proposed that one of the licenses for a 2X10MHz block of 800MHz comes with a coverage obligation to bring mobile broadband services for indoor reception to 98 percent of the population by the end of 2017.
Also, Ofcom has reserved some of the 800MHz spectrum for a fourth mobile operator -- which is likely to be Three UK , but could also be any other alternative service provider -- to enable them to be a credible competitor to EE , Telefónica UK Ltd. 's O2 and Vodafone UK .
Those restrictions means there is less unfettered 800MHz spectrum to go around.
"One of the leading operators in the U.K. isn't going to get an 800MHz license," says Gabriel Brown, senior analyst at Heavy Reading . "Having the 800MHz spectrum is a big advantage for getting coverage -- and you need a 10MHz channel for LTE. They have to decide how much they want to bid to make it worth their while."
This has always been the case with the 800MHz spectrum in particular, however. According to Ovum's Howett, "it's not possible to get everyone to have the same spectrum -- they're just going to have to roll out different networks."
What's at stake in this auction is U.K. mobile operator's future networks.
"Spectrum is literally the air [operators] breathe -- without it, they will die," said CCS Insight's Collins. "It's that crucial."
— Michelle Donegan, European Editor, Light Reading Mobile