Ofcom has released a consultation on the liberalisation of the 900MHz and 1800MHz radio spectrum, currently used by mobile operators for 2G GSM services. Current deployment sees Vodafone and O2 as the sole users of the 900MHz band, whilst 1800MHz is shared primarily between T-Mobile and Orange, with Vodafone and O2 having a small amount of the spectrum available.
The main benefit will see the relaxation of licensing that restricts the use of these bands to GSM based services. Mobile operators will be able to deploy 3G UMTS within this spectrum which will improve coverage (into rural areas for example) and quality of service (particularly when used in the 900MHz range). Current 3G services operate at 2100MHz, with the above operators and Hutchison 3G (Three) each having a slice available for use. Radio signals travel further and are better at penetrating buildings at a lower frequency. Having the 900MHz spectrum available for 3G would mean that coverage and signal strength could be improved (current license obligations require that 3G should cover at least 80% of the population by the end of 2007), and would also require less mobile phone masts to provide the service, generating cost savings to the mobile operators. This should help expand the mobile broadband market, making services more broadly available.
To enable this to happen, Ofcom are looking at options for redeploying the 900MHz spectrum used by Vodafone and O2. The favoured approach is a partial mandatory spectrum release, which will see some of the 900MHz band made available by auction for other operators by 2010. Ofcom hope this will promote competition and efficient use of the spectrum, helping to develop mobile broadband services. The approach favoured for 1800MHz, which has less significant benefits over the 2100MHz 3G band, is liberalisation which will allow the bands to be tradable and used for services other than GSM. If this goes ahead, there could be significant costs (up to an estimated £770million for Ofcom's favoured approach) to Vodafone and O2 as they would have to re-engineer their networks to release the spectrum, and encourage 2G to 3G migration.
The full consultation is available here and is open to responses.