The UK’s four mobile operators pledged a combined £1.36 billion in a swiftly contested auction of fresh allocations of 5G suitable frequencies, with a total of 200MHz sold across the 700MHz and 3.6GHz to 3.8GHz bands.
Regulator Ofcom put 34 lots up for sale in the auction, which started last week having been delayed by two months [1] due to issues around the Covid-19 (coronavirus) pandemic.
Following the completion of the bidding stage, the operators will now negotiate for specific allocations in a four week assignment process.
The sum raised matches the amount raised by regulator Ofcom in the country’s auction of 4G and 5G spectrum in 2018 [2]. The biggest spender was BT-owned EE, which splashed a total of £452 million on 20MHz of paired spectrum in the 700MHz band, 20MHz supplementary downlink in the same band; and 40MHz in the 3.6GHz to 3.8GHz band.
Telefonica’s O2 UK paid £448 million for 40MHz in the 3.6GHz to 3.8GHz band and 20MHz of paired spectrum in the 700MHz band.
CK Hutchison brand 3 UK won two allocations of 10MHz paired spectrum in the 700MHz band for £280 million. Vodafone UK spent £176.4 million for 40MHz in the 3.6GHz to 3.8GHz band.
All four operators released statements highlighting the strengths of their relative spectrum positions and noting the added allocations would help improve coverage for customers.
Vodafone UK CEO Ahmed Essam explained its low outlay, stating it had “avoided expenditure on low band spectrum, where it is our strategy to refarm over time our significant 900MHz holdings to carry 5G traffic.”
Analyst view
CCS Insight director for consumer and connectivity Kester Mann noted grabbing allocations in the 700MHz category had been especially important to EE and 3UK as they were “lagging in low-band frequencies, which are best-suited to achieving wide-area, rural and in-building coverage”.
“The swift conclusion of the auction and the relatively modest overall spend is good news for UK consumers,” he added. “The UK was fast out of the blocks with early 5G launches in 2019, but progress has been hindered by the government ban on Huawei [3].”
PP Foresight tech, media and telco analyst Paolo Pescatore said: “The main process concluded so quickly as all providers were successful in securing the spectrum they needed,” adding “all of the operators are seeking to maximise their current holdings in the face of increasing costs and margins being squeezed”.
[1] https://www.mobileworldlive.com/featured-content/top-three/ofcom-stalls-uk-5g-auction
[2] https://www.mobileworldlive.com/featured-content/home-banner/uk-operators-spend-1-4b-in-4g-5g-auction
[3] https://www.mobileworldlive.com/featured-content/home-banner/rivals-circle-as-huawei-thrown-out-of-uk-5g
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