Ofcom to impose mobile spectrum caps in upcoming auction – Three blasts 37% cap

Ofcom has announced that the rules governing the auction of 40MHz of spectrum in the 2.3GHz band and 150MHz in the 3.4GHz band (increasing the amount of spectrum available for mobile devices in the UK by a third) will include spectrum caps to safeguard competition over the coming years.

As the regulator proposed in November, it will place a cap of 255MHz on the ““immediately useable” spectrum that any one operator can hold following the auction – preventing BT/EE from bidding for spectrum in the 2.3GHz band as it is already at this limit.

Secondly, Ofcom has opted to place an additional cap of 340MHz on the overall amount of spectrum any one operator can hold after the auction – equivalent to 37 per cent of the mobile spectrum expected to be useable in 2020 (including the spectrum in the auction and the 700MHz band). Three has campaigned for a 30 per cent cap, while O2 has pressed for a 35 per cent cap.

Back in November, Ofcom set reserve prices of £10m per 10MHz lot of the 2.3GHz band, and £1 million for a 5MHz block in the 3.4GHz band.

The regulator states that its final auction rules reflect changes in the marketplace that taken place since it consulted in November, citing its reduced confidence that the 3.6-3.8GHz will be available for mobile use around the same time that the 3.4GHz band. However, Ofcom still intends to make the 3.6-3.8GHz band available for mobile as soon as possible and says that it will shortly publish its preferred approach. Ofcom also cites evidence that operators with lower shares of spectrum cannot easily deliver more capacity by relying on other approaches – strengthening the case for spectrum caps in the auction.