UK Preps LTE Auction for 2012

After years of waiting, U.K. mobile operators may finally get a chance to acquire new spectrum after the country's regulator, Ofcom , today announced plans for holding an auction for 2.6GHz and 800MHz frequencies in early 2012. (See Ofcom Starts 4G Countdown.)

Legal wranglings over the last several years have delayed the release of the much-sought-after frequencies in the 800MHz and 2.6GHz bands, which are suitable for Long Term Evolution (LTE), and the U.K. has been surpassed by countries -- such as Germany, Sweden, Japan, and the U.S. -- where new spectrum has been released and operators have already launched next-generation mobile broadband services. (See Europe Faces 4G Spectrum Delays, UK Spectrum Auction Likely in 2011, BT Suffers as Ofcom Delays 2.6GHz Auctions, UK WiMax Faces Spectrum Fight, Ofcom Lawsuit Looms, T-Mobile Challenges Ofcom, Ofcom Delays 2.6GHz Auction and UK Operators Brace for Spectrum Struggle.)

Now, Ofcom CEO Ed Richards is eager to award this spectrum in the second quarter of 2012 as planned to avoid the U.K. becoming a mobile broadband "laggard." The regulator's expectation is that operators would begin offering new services, like LTE, in 2013.

"There's a danger if we don't make the timeline we set out that we become laggards," Richards said at a press briefing at Ofcom's headquarters in London on Tuesday morning. "We don't want to fall further behind."

Ofcom published its proposals (PDF) for the auction today and an industry consultation will run until the end of May. Ofcom will then give its final decision about the auction design, based on the consultation, in the autumn this year.

"What I hope doesn't happen is that the debate spills over into litigation," said Richards. "That would delay the [spectrum] award. And if it's delayed, then there's only one loser and that's the British consumer."

The stakes are high, of course, and the spectrum situation among the country's four mobile operators -- Three UK , EE , Telefónica UK Ltd. and Vodafone UK -- appears every bit as complex as it did several years ago when Ofcom tried to design this spectrum auction. This significance is not lost on Richards, however.

"These [frequencies] are the strategic assets for companies in this market for the next 20 years -- that's what this is all about," he said.

The LTE auction basics
Ofcom wants to ensure that there are at least four national mobile operators in the U.K. market. To achieve that, it has proposed setting limits on both the minimum and maximum amounts of spectrum that any bidder can win, called auction "floors" and "caps," respectively.

The proposed spectrum holdings cap, generally, is set at 2x105MHz, which means no one operator can acquire more than that. Specifically, there is also a cap on spectrum holdings in the frequency bands below 1GHz, which is set at 2x27.5GHz.

The auction floors proposed are any of the following spectrum holding combinations:
  • 2×5MHz of sub 1GHz spectrum and 2×20MHz or more of 2.6GHz
  • 2×5MHz of sub 1GHz spectrum and 2×15MHz or more of 1800MHz
  • 2×10MHz of sub 1GHz spectrum and 2×15MHz or more of 2.6GHz
  • 2×10MHz of sub 1GHz spectrum plus 2×10MHz or more of 1800MHz
  • 2×15MHz or more of sub 1GHz spectrum

In addition, Ofcom has proposed that one of the licenses in the 800MHz band include an obligation to cover 95 percent of the U.K. population with mobile broadband service by the end of 2017.

Ofcom is also considering allocating some paired spectrum in the 2.6GHz band for "shared low-power use," which essentially means indoor coverage using devices like femtocells or picocells.

Those are the main proposals for which Ofcom is seeking industry input in its consultations. In the next few months, the regulator will also consult on interference management in the 800MHz band between mobile operators and digital TV providers, as well as the technical conditions for using the 800MHz and 2.6GHz frequency bands.

— Michelle Donegan, European Editor, Light Reading Mobile

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