Orange, 3, T-Mobile, Vodafone and O2 between them paid £22.5
billion for 3G licences in 2000 and much of that investment has
been written down as networks struggled to recoup their investment.
The new spectrum is likely to be sold off at much lower prices.
"The award of this spectrum will play a key role in the
implementation of Ofcom’s strategy of spectrum release," said the
Ofcom report announcing the sale. Three bands of spectrum will be
made available, one at 2500 to 2690 MHz, one at 2010 MHz to 2025
MHz and a third at 2290 to 2300 MHz. The first band, referred to as
the 2.6 GHz band, is the biggest and most important, Ofcom
said.
The spectrum should be made available by the end of 2007, though
the regulator believes that that date could slip to early 2008.
Consultation is now open on the process.
Ofcom has said that the spectrum could be used for anything, but
has identified the four most likely uses: 3G mobile phone
telephony; wireless broadband using the still-developing WiMAX
standards; mobile television broadcast to handsets, and special
one-off uses, such as event communication or video
transmission.
The release of spectrum would create opportunities for new
entrants into the 3G market "offering services in competition with
the existing operators which could result in price reductions and
more consumer choice for services," said Ofcom.
Spectrum used to be auctioned for specific purposes, but Ofcom
now makes it available without specifying what it should be used
for, and its list of possible uses is simply a list of
suggestions.
Its technology neutral approach puts it in conflict with some
European regulators, though, who want the 2.6 GHz band used
specifically for IMT-2000 services, which is the International
Telecommunications Union's standard for 3G technology.
The European Conference of Postal and Telecommunications
Administrations (CEPT) and the Radio Spectrum Committee (RSC) are
the two relevant regulators, and Ofcom says that CEPT is leaning
towards a technology-specific view, but that the UK can, and has,
opted out of its recommendations.
Should the RSC decide to opt for a similar view, though, the UK
could not opt out, and its decision is expected in July 2007. Ofcom
says that it does not believe that regulators should specify the
use of spectrum.
"A key issue for the design of the award concerns the degree of
flexibility in the way that the 2.6 GHz band can be used and the
amount of unpaired spectrum and paired spectrum there should be in
the band," it said. "Ofcom considers that regulators are ill-placed
to judge the appropriate balance between these alternative uses of
spectrum. Moreover, this is a decision that can be left to the
market."
