Ofcom updates 4G auction proposals

[Ben]

UK telecoms watchdog Ofcom outlined a number of new proposals for the country’s planned 4G auction, which it said introduces “measures expected to extend coverage to at least 98 percent of the UK population and revised plans to promote competition.”

Stakeholders now have 10 weeks to comment on the proposals, before a final decision on the auction design is made in the summer. The licensing process will kick-off “a few months later,” starting in the fourth quarter of 2012.

Previously, Ofcom had suggested that a special condition be attached to one of the 800MHz licences, obliging coverage of 95 percent of the UK population with the 4G network. It said that this could now be “strengthened in one of two ways”: by increasing this requirement to 98 percent population coverage or, a “potentially more effective option,” by mandating coverage of “not spot” coverage areas, supported by a previously announced £150 million government investment to boost mobile reception in underserved areas.

By looking to promote the rollout of 4G networks to areas currently with poor mobile signals, Ofcom will avoid the possibility that the operator with the rollout obligation will focus on metropolitan areas in order to achieve the greatest population coverage.

The regulator also said that it believes customers will receive better services at lower prices “if there are at least four national wholesalers of mobile services” – which means that operators need the “right quality and mix of spectrum.” It has identified a number of options for the auction process to promote competition, and includes options for the reservation of “varying amounts of spectrum” so that at least four networks can be supported.

In its consultation, Ofcom proposed safeguards including spectrum caps both on holdings of sub-1GHz spectrum, as well as frequency holdings in total.

In order to generate interest from new entrants, Ofcom is planning to reserve some spectrum in the 2.6GHz band “to be shared by a group of companies to deliver innovative new mobile services for consumers.” Options mooted include local networks for student campuses, hospitals or offices.

The regulator said that digital dividend (800MHz) frequencies and 2.6GHz spectrum will be auctioned, with the spectrum available “equivalent to three quarters of the mobile spectrum in use today.”

http://www.mobilebusinessbriefing.co...roposals/21475

[Wilt]

Everything Everywhere isn't happy about it. The other operators seems happy about it at the moment, though - looks like EE are spitting the dummy out because they're no longer being reserved any spectrum.

I think attaching the coverage obligation to only one license is an interesting move, and it'll go either one of two ways. Either the other networks will try and compete with the coverage levels of whatever operator has this license, which will keep prices low, or we'll have three operators with reasonable prices but comparatively poor coverage and one expensive operator with 98% coverage.

I don't understand why the obligation has to be by % of population covered, though, surely stipulating a % of geographical coverage would be more effective at ensuring rural areas get covered.

[Ben]

I don't understand why the obligation has to be by % of population covered, though, surely stipulating a % of geographical coverage would be more effective at ensuring rural areas get covered.

The article mentions the possibility of mandating not-spots be covered, rather than 98% of the population, and that's the route I'm hoping they take. I think it'll be more effective - we all know 98% of the population means diddly squat in terms of geographic coverage once the networks have made up their coverage stats.

As for Everything Everywhere, well, hopefully the fact that O2 and Vodafone are singing a much happier tune, that new-entrant Three seems to still be happy with, will somewhat muffle their displeasure. In fact, as they're by far the biggest network now, Ofcom should take pleasure in the fact that everyone but the biggest network is placated.

[Wilt]

The only issue with the 'not spot' route, is how do you define a 'not spot'? Or perhaps more importantly, who will be defining it?

Will it be the operator? In which case, are they only going to go as far as providing a token effort then giving up when the £150million is exhausted?

Or are Ofcom going to try and do it? Are they even allowed to tell a private company where they must place resources?

[Ben]

That's the thing, I don't think it specifies, at least not in the news reports. If Ofcom specifies the areas that must be covered then we should be ok.

I think Germany did a similar thing and it worked really well. At the end of the day, if the condition is only tied to one license then there's no obligation on any private company to bid for it.

[Hands0n]

This is a good plan, generally. The only thing is that the networks must not be permitted to cause any further delays. We are already 18 - 24 months behind the rest of Europe!