The UK's telecoms regulator, Ofcom has published a reviewed proposal for its delayed 4G spectrum auction. The new proposals includes introducing new measures expected to extend coverage to at least 98% of the UK population and revised plans to promote competition.

The regulator plans to auction the 'digital dividend' airwaves in the 800MHz band, along with higher frequency airwaves in the 2.6GHz band at the end of 2012. This will be equivalent to three quarters of the mobile spectrum in use today.

Ofcom has today launched a second consultation to provide stakeholders with an opportunity to comment on these proposals, before making its final decisions for the auction.

Greater coverage

In the March 2011 consultation Ofcom proposed that a special condition should be attached to one of the 800MHz licences, obliging the holder to roll out a 4Gnetwork to 95% of the UK population. In October, the Government announced plans to invest £150m to boost mobile coverage in those areas with poor or no mobile service. A significant part of this money is likely to be spent on building new mobile infrastructure in areas of the UK where there is little or no commercial incentive for operators to do so.

Ofcom said that it now believes that the special condition it previously proposed can be strengthened in one of two ways.

The first option is to increase the obligation to 98% of the UK by population. However, the second and potentially more effective option, is to require that one 800MHz operator provides 4G coverage that not only matches existing 2G coverage but also extends into mobile 'not spot' areas of the UK where the £150m will provide infrastructure capable of supporting 4G coverage. This may have the potential to extend 4G mobile coverage even further than 98% of the UK by population. Also, this second option would make it more likely that mobile broadband services would be provided in locations where they could be most valued by consumers, rather than in those areas where it is easiest for a licensee to meet the obligation.

Promoting competition

Ofcom continues to believe that consumers are likely to receive better services at lower prices in the future if there are at least four national wholesalers of mobile services. Without the right quality and mix of spectrum, an operator might struggle to compete with other national wholesale providers.

In light of the consultation responses and evidence, and Ofcom's further analyses, Ofcom says that it has identified a number of options for measures in the auction to promote competition in future mobile services markets.

Ofcom is also proposing 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. Potential applications include local mobile networks for student campuses, hospitals or commercial offices, which operate on short-range frequencies serving a small area.

Next Steps

Stakeholders have 10 weeks to comment on Ofcom's revised proposals. A final decision on the auction design will be made in the summer of 2012. The auction itself will follow a few months later, starting in Q4 2012.