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Ofcom introduce new legislation to allow spectrum trading
Monday 20 June 2011 16:11:30 by John Hunt

Ofcom, the telecommunications regulator, have given mobile operators the green light to start trading spectrum which is used to operate mobile phone networks. Currently, Everything Everywhere (formerly T-Mobile & Orange), O2, Three and Vodafone have various frequency allocations in three bands (900MHz, 1800MHz, and 2100MHz) which are available for use to operate their networks. The new rules which have been required by central government mean that mobile networks will be able to trade these between themselves and also in the future may allow leasing them to other companies who may be interested in running a mobile network.

The question lies in what will happen when the new legislation comes in to force on the 4th of July 2011. Three and Everything Everywhere may well be interested in acquiring spectrum in lower frequencies such as the 900MHz band that O2 and Vodafone currently use, but with 800MHz to become available in the future, they may be better off waiting for the auctions of those to take place. Ofcom are currently proposing that network operators should have a limit to the amount of spectrum they can hold under 1GHz, although O2 believe that these 800MHz auctions, which allow next-generation mobile broadband such as LTE, are illegal. With this in mind, it could make 900MHz less desirable in the long term (the lower the frequency, the larger the range of the network). On the other hand, the EU are proposing that current frequencies should be made available for use by next-generation mobile network devices (4G) by the end of the year, which may make the 900MHz spectrum more valuable in the short term.

Three, the network with the least desirable spectrum (only operating in 2100MHz), feel slightly aggrieved by the rules as they are not likely to gain any benefit from trying to trade their existing spectrum.

"Spectrum is the lifeblood of the mobile internet and for those with surplus holdings it is also a strategic asset. This move simply allows those who have been gifted access to public spectrum to profit from it, with no benefit for UK taxpayers.

"Ofcom's ambition to deliver faster and more capable services to consumers is best served by a truly competitive allocation of this public asset."

Three spokesperson

The full Ofcom document including the legislation can be found here (PDF).


Posted by otester over 6 years ago
The best way is something like MBNL, then there is no squabbling.
Posted by otester over 6 years ago
**C&W LLU might be a better example instead of MBNL.
Posted by craigbrass over 6 years ago
BIG difference between C&W LLU and MBNL. C&W wish to make a profit at wholesale level. MBNL are not designed to make a profit and contributions are made from Three / Everything Everywhere based on how many users each company has. If it was forced to stay this way, there would not need to be competition at network level.
Posted by otester over 6 years ago

My original case for suggesting C&W instead was because it seemed easier to resell, how easy would it be for a newcomer to join MBNL?
Posted by craigbrass over 6 years ago
@otester: If the Gov said in exchange for free spectrum, you have to create a single radio access network that covered near-100% land coverage, Voda and O2 would soon be part of MBNL or a new company would be created to do this. If networks are spending on creating individual networks and paying for spectrum, they are not left with any to build networks...
Posted by bigluap over 6 years ago
Hence the reason three dumped their lower frequency share with Orange on the grounds it was costing £80m but would result in the loss of £8m of custom, hence a £72m gain in profit.
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