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Operators begin bid for Ofcom spectrum auction

Saf Malik
March 17, 2021

EE, O2, Vodafone, and Three each won a portion of the offering

Communications regulator Ofcom has today revealed the winners from the ‘principal stage’ of their latest 5G spectrum auction for the 700Mhz and 3.6-3.8GHz bands.

A total of £1.356 billion was spent across the bands with EE spending £452m, the most of any operator.

Hutchinson 3G paid £280m for 20 MHz of the 700 MHz band while Telefonica (O2) paid £448m for a similar package to EE. Meanwhile, Vodafone spent £176.4m for 40 MHz in the 3.6-3.8 GHz band.

The auction included a 37 per cent (416MHz) cap on the overall amount of spectrum that any of the mobile operators can hold the following auction.

All four operators won a portion of the offering and the proceeds of the auction will be paid to the Treasury.

The auction is set to move to the assignment stage where companies will bid for the frequency positions they prefer.

O2 CEO Mark Evans said:

“We are pleased to announce that Telefónica UK (O2) has secured a significant share in the latest spectrum auction, investing £448m to obtain 40Mhz of 3.6GHz and 20MHz of 700 MHz FDD.  

“This demonstrates Telefónica’s continued commitment to the UK Market and the very best connectivity for our customers. We are delighted with the result, which secured the right spectrum at a fair price.   

“This additional spectrum will allow for continual improvement in our network. We pride ourselves on being a champion of reliability and quality coverage and look forward to continuing to invest in digital infrastructure to build Britain’s connectivity, for the benefit of all.”

Three chief executive officer Robert Finnegan said: “We are delighted to have won two 10MHz blocks of low frequency spectrum at the auction.

“This triples the amount of low frequency spectrum we own and will have a transformative effect on our customers’ experience indoors and in rural areas.

“Coupled with our existing low frequency spectrum and the UK’s largest 5G spectrum holding, we are in a fantastic position to deliver a great network experience for our customers now and in the future.”

Tech media and telco analyst Paolo Pescatore also offered his thoughts. He said: “The main process concluded so quickly as all providers were successful in securing the spectrum they needed. Expect to see some haggling behind closed doors in the next assignment stage. Fingers crossed this new spectrum can be used by the summer.

“However, Vodafone remains the only operator not to secure any 700 MHz spectrum as it will reaffirm 900 MHz for 5G services.

“All of the operators are seeking to maximise their current holdings in the face of increasing costs and margins being squeezed.

“It is highly unlikely that we will see a change in approach to 5G deployment. To date, the focus has been on cities and data-hungry locations for the rollout of 5G. This will continue especially with those winning securing 700 MHz which will be used for indoor coverage as well in the short term.

“Ultimately the operators will seek to leverage 700 MHz in rural areas in the future, but not immediately.”

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