Ofcom limits BT and Vodafone's buying power in upcoming 5G spectrum auction

Carly Page
@CarlyPage_
11 July 2017

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TELECOMS WATCHDOG Ofcom has announced that it will limit the amount of spectrum that mobile operators can snap up to use for future 5G services.

Later this year, Ofcom will auction licences to use 190 MHz of spectrum in two frequency bands - 40Mhz in the 2.3GHz band, and 150Mhz in the 3.4GHz band.

The watchdog announced on Tuesday that, as it proposed in November, BT will be excluded from bidding for the 2.3GHz band.

An overall cap of 37 per cent will be placed on the second band, which means BT and Vodafone, which currently own 45 per cent and 28 per cent of the spectrum currently available, will be restricted in how much of the critical 5G spectrum they can buy up later this year.

Philip Marnick, Ofcom's Spectrum Group Director, said: "Spectrum is a vital resource that fuels the UK's economy. We've designed this auction to ensure that people and businesses continue to benefit from strong competition for mobile services.

"We want to see this spectrum in use as soon as possible. With smartphones and tablets using even more data, people need a choice of fast and reliable mobile networks. These new airwaves will support better services for mobile users, and allow operators to innovate and build for the future."

Ahead of Ofcom's decision, smaller operators - namely Three and O2 - had called for the introduction of spectrum caps amid growing fears of an unbalanced market. O2 has called for a 35 per cent cap, while Three had called for a 30 per cent cap that would have prevented BT from bidding at all.

Three, which received the backing of TalkTalk, CityFibre, Federation of Communication Services (FCS), Gamma and Relish in its campaigning, isn't happy with Ofcom's announcement today, and described it as a "kick in the teeth for all consumers."

Three CEO Dave Dyson said: "By making decisions that increase the dominance of the largest operators, Ofcom is damaging competition, restricting choice and pushing prices up for the very consumers that it is meant to protect.

"The mobile market is imbalanced and failing customers. Ofcom has shown little interest in tackling the problem. We will consider our response as a matter of urgency."

In its decision, however, Ofcom points out that Three picked up more potential 5G spectrum with its acquisition of UK Broadband in February.

EE has also spoken out about Ofcom's proposed spectrum cap. The firm's CEO Marc Allera said: "While we don't agree that spectrum caps were necessary for this auction, our focus remains on investing in our network, using our existing and future spectrum to provide the best mobile experience for our customers across the UK.

"We look forward to bidding for additional spectrum in this auction." µ