Feeds

UK 4G auction: No word on what will be flogged, or what it costs

So we're all ready to go then?

Internet Security Threat Report 2014

Last week the Ofcom announced details of the upcoming 4G spectrum auction, only the regulator still can't say how much spectrum is on sale, what it will cost, or the annual rent due afterwards.

The mega-auction announced last week includes bands at 800MHz, which've been cleared of analogue TV, and at 2.6GHz, which has been empty for a while. But it looks like the auction might also include 30MHz of 1800MHz spectrum which Everything Everywhere is required to be shot of by September 2013. EE won't say if it will throw the band into the ring, or sell it privately, while Ofcom still hasn't decided if the band can be used for 4G anyway, making it impossible to place a value on it.

That leaves the entire 4G proposal bracketed with "if" statements and assumptions about who might buy that block. EE wants Ofcom approval to deploy 4G across its whole 1800MHz holding, including the block being sold off, but Ofcom is still mulling that over while the rest of the industry holds its collective breath to see what the regulator decides.

The block has to be sold because of EE's overwhelming ownership of UK spectrum. Formed by the merger of Orange and T-Mobile, EE owns nearly half the mobile-phone spectrum in the UK, so it is required to divest itself of 30MHz of spectrum at 1800MHz. That still won't make all the players even, though – EE will still have almost twice the spectrum holdings of Vodafone, which in turn has more than twice Three's holding – but it will level the playing field slightly.

EE has been campaigning hard for permission to deploy 4G (LTE) in that 1800MHz band, including the 30MHz it will be selling, but the other operaters are fiercely opposed - saying the move will give EE an unfair lead as they won't be able to launch LTE until after the auction. If Ofcom decides to permit LTE at 1800MHz then that makes the 30MHz block more valuable, assuming EE can sell it off quickly enough for the buyer to take advantage of the vanishing lead.

The perfect solution would be for Three to buy the block from EE, then use that as a foundation from which it can bid for enough spectrum to remain in the game. Indeed, half of Ofcom's scenarios for a reserved packaged (earmarked for "a 4th operator" – or "Three" as it's known to those unencumbered by legalese) involve Three owning the 30MHz block, and the company admits to being interested in it.

Who buys something without knowing how much it costs?

That makes it very hard for EE to get the best price for the block, with a purchaser-apparent at hand. O2 wouldn't be interested in the block, which is separated from its existing, minimal, holdings at 1800MHz, so EE will try to get Three and Vodafone bidding against each other - the block is adjacent to Voda's existing holding - but it still won't be an easy sale.

Not least because the 30MHz block comes with an annual rental which won't be set until after the auction.

Prior to the 3G auctions in 2000, all radio spectrum was allocated, not sold, so Vodafone and O2 have allocations at 900MHz and thin slices at 1800MHz, while EE has a huge block at 1800MHz part of which it will be selling. Everyone except Three got to share in this bonanza, and Three has hoping that the 4G auction would provide restitution. It doesn't go as far as Three would like, but after the auction Ofcom will start charging a proper rent on those allocated bands, that rate being calculated from the prices paid for the auctioned bands, to properly reflect the market value.

But that means EE has to sell 30MHz of spectrum without the buyer knowing what it can be used for, or how much it will cost in annual rent, immediately prior to the largest auction of radio spectrum the country has ever seen – a challenge for the toughest of salesmen.

We do know that the rest of the spectrum will be sold off in 5MHz pairs, with the exception of one 30MHz block at 2.6GHz which is intended for time-division technology (TD-LTE), which is already being deployed in China and India. That's important as the 3G TD blocks, owned by all the operators except Vodafone, have been sitting empty since 2000 and Ofcom doesn’t even count them towards the overall caps on spectrum ownership.

Those caps, which total 210MHz each, with no more than 55MHz below 1GHz, are in place to ensure that the spectrum is split four ways rather than three.

Ofcom remains obsessed by the idea of having four networks in the UK, only it can't say "networks" any more, as EE and Three share network infrastructure these days, while Vodafone and O2 are working towards the same thing. So rather than "network operators", the four companies are called "service wholesalers" instead. But whatever they're called, Ofcom firmly believes we should have four of them, each owning their own radio spectrum.

It has been a week since Ofcom's statement was published, and the legal changes necessary to make it all happen are up for consultation until 11 September. The document is long, and dull, but one might expect the operators service wholesalers to have opinions on the subject by now.

Ofcom's decision on EE's spectrum is will tip the balance, and EE's decision on whom it will flog it to and how will also change the landscape significantly, so no one is committing to anything until those decisions are made. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Same old iPad? NO. The new 'soft SIMs' are BIG NEWS
AppleSIM 'ware to allow quick switch of carriers
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.