Ofcom Delays Spectrum Auction Until After O2-Three Merger Ruling

Ofcom will delay the auction of 2.3GHz and 3.4GHz spectrum until the European Commission (EC) has made its judgement on the proposed £10.25bn merger between Three and O2.

The regulator ad planned to sell 190MHz of bandwidth in ‘early 2016’, but both operators had indicated they would take ‘judicial proceedings’ to prevent the auction if it was to take place before the EC’s decision.

A final ruling by the EC is expected in mid-May and Ofcom says the auction will take place after that.

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Ofcom auction spectrum

“After careful consideration, given these specific circumstances, we have decided for reasons of good public administration to delay commencing the auction process,” it said in a statement. “Therefore, Ofcom will not now commence the auction process until the European Commission has taken its decision as to whether the proposed merger between Telefónica UK Limited and Hutchison 3G UK Limited is compatible with the common market.”

The airwaves available have been vacated by the Ministry of Defence and both bands are capable of carrying large amounts of data. It is claimed the amount of spectrum available is equivalent to three quarters of that sold at the auction of 800MHz and 2.6GHz frequencies in 2013.

The 2.3GHz band is used for 4G in a number of non-European countries while 3.4GHz is used for wireless broadband in a number of countries. In the UK, Relish’s home broadband service makes use of the band.

No cap will be set as to how much bidders can buy as Ofcom believes this will discourage interest parties from buying large blocks of adjacent spectrum that can be used for very fast download speeds ahead of the rollout of 5G services.

The spectrum will be sold in lots of 10MHz for 2.3GHz and 5MHz for the 3.4GHz band. A reserve price of £10 million per lot for the former band and £1 million for the latter has been set.

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