EE, Vodafone, Three and O2 commence spectrum auction bids

Communications regulator Ofcom has begun the process of awarding 5G spectrum in the 3.6 to 3.8 GHz band through its latest spectrum auction.

The auction, which an Ofcom representative told Land Mobile “could take months” to complete in full, will increase the total amount of spectrum available for mobile technology in the UK by nearly a fifth.

This auction, the second of its kind, involves EE, Vodafone, Three and 02 bidding for spectrum across two different frequency bands: 700 MHz and 3.6-3.8 GHz.

The four companies will bid for 24 lots of spectrum in the 3.6-3.8GHz band; four lots of 700 MHz individual frequency and six lots of 700 MHz paired frequency.

At the end of the second day of the auction on Monday, the bidding between the four telecoms giants had pushed the 3.6GHz lots price from its opening reserve of £20m to £22.05m. The price for 700 MHz paired frequency lots rose to £140m from a £100m reserve and from £1m to £1.1m for the individual lots.

Ofcom has released 80 MHz of spectrum in the 700 MHz band, following a four-year programme to clear the band of its existing uses for digital terrestrial TV and wireless microphones. The regulator said “these airwaves are ideal for providing good-quality mobile coverage, both indoors and across very wide areas – including the countryside”.

Alongside this, 120 MHz of spectrum is available for bids in 3.6-3.8 GHz band, the primary band for 5G.

Winners of spectrum in the 3.6-3.8 GHz band will also have the opportunity to negotiate the specific frequencies among themselves, if they want to join together the airwaves they have secured within a particular band. There is a four week assignment stage following the conclusion of the bidding.

A chart explaining how Ofcom's Spectrum Auction process will work in 2021

Ahead of the first round of bidding, Ericsson's chief technology officer for networks in the UK, Bjorn Odenhammar, told Sky News: "The next couple of months will really define how successful the UK will be in 5G and whether it can establish global 5G leadership."

In the first 5G auction in 2019, Vodafone won 50 megahertz in the 3.4 GHz band for £378m. EE paid £303m for 40 megahertz, while Three scored 20 megahertz in the band for £151m.

O2 won 40 megahertz for £318m, taking the entire 2.3 GHz band that Ofcom had put up for auction.