Ofcom proposed last month to sell off part of the 900MHz wireless spectrum, which is currently licensed to Vodafone and O2 for 2G services.Vodafone, O2, T-Mobile and Orange also run 2G services on 1,800MHz, while all UK operators including 3 run 3G services over 2100MHz.Ofcom’s proposal to free up space in the 900MHz band will allow for up to three other operators to use it for 2G or 3G services. The proposal means Vodafone and O2 would each release some spectrum, but would still retain most of it.
The licence would be open to an entirely new operator or for new services by the remaining UK networks. It has been reported that web search giant Google may bid to establish itself as a UK network.
An Ofcom spokesman said: “We would not do anything to jeopardise existing 2G services. Vodafone and O2 will still have ample spectrum left to serve their customers.”Spokespeople from Vodafone and O2 said network heads were considering the proposal and would respond within the next few months.
If the proposal were to go through, both networks would pay a reduced licence fee.
Ofcom intends to auction off the released 900MHz spectrum in 2009 with the winner potentially able to use it from 2010.
“We want to make sure whoever we give the new licence to uses it as efficiently and intensely as possible,” said the Ofcom spokesman.
“An auction is effective for this, because the organisation which has created a business plan to generate the most revenue will bid the most for the spectrum. An operator could easily launch a 3G service at 900MHz.”
The 900MHz spectrum is said to be more efficient than higher spectrums, because it can carry transmissions further, so a network would need to build fewer base stations. A signal at 900MHz can also penetrate buildings more effectively.
Ofcom believes allowing future 3G services to use 900MHz could make it possible to build a high quality mobile broadband network to cover 99 per cent of the population, as the spectrum is more efficient for providing 3G services to rural areas.
The move could also generate £6 billion in extra revenue for networks. “It will be good for consumers, as they will have access to new services and technologies,” said the Ofcom spokesman.
“It will also have a positive effect on prices. As we have seen in the market already, as there has been more and more competition, prices have been driven down.”