UK's Ofcom to auction 2.6GHz spectrum by mid-2009

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UK's Ofcom to auction 2.6GHz spectrum by mid-2009

By CAROLINE GABRIEL

Published: 5 November, 2008

READ MORE: Spectrum | UK | Regulator

It looks as though the UK's much anticipated auction of 2.6GHz mobile broadband licenses will go ahead in the second quarter of 2009, even though regulator Ofcom is still facing legal challenges from T-Mobile and O2. Ofcom issued an update last week, indicating that it expected the court cases to be decided by the end of February at the latest, leaving it free to sell the spectrum two or three months later.

If the UK sticks to this timetable, it will still be the first major EU economy to auction this spectrum, which was originally earmarked for 3G expansion but which most regulators will now offer on a technology neutral basis. Norway and Sweden have already held auctions, but other large nations like France and Germany will only undergo the rulemaking process next year.

The UK sale, originally scheduled for late 2007 and then for this fall, was postponed because O2 and T-Mobile sued Ofcom for trying to sell the licenses before it had completed its rulemaking on refarming 900MHz GSM spectrum for 3G - something that could reduce 3G carriers' need for 2.6GHz licenses, and certainly affect the spectrum's valuation.

The UK auction is potentially the most significant sale of 2.6GHz licenses in the EU, because it is the most open to a new technology such as WiMAX and is regarded as a bellwether for various reasons. Ofcom has been more aggressive than many fellow regulators about opening up new bands with as few regulations as possible in order to encourage new services and new operators. And, unusually among European states, incumbent telco BT has no wireless networks, but is widely expected to re-enter the wireless market - which it quit when it spun off its mobile arm, now Telefonica-owned O2 - via a 2.6GHz license.

It has shown a strong interest in WiMAX, and so could be the technology's route to a national network in the heartland of 3G and LTE. Also of interest to the WiMAX community is Ofcom's stance that it will leave 2.6GHz winners to decide whether to implement TDD or FDD networks, according to their business models, rather than defining the split between the two profiles, as most regulators are doing. This could make a license more attractive to a data-driven carrier, since TDD spectrum is advantageous for this model.