5G auction: Regulator tries to level the playing field by clamping down on BT and EE mobile dominance

Oliver Gill
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Ofcom will auction off faster airwaves to mobile operators later this year (Source: Getty)

The UK's telecoms regulator has shut out BT and its mobile subsidiary EE from the auction of higher spec airwaves and capped what it can snap up to support critical 5G technology.

Ofcom today revealed the rules of engagement as it sells off two sets of mobile spectrum later this year.

The first wave, 40 MHz in the 2.3GHz band, is already supported by a number of phones on the market. With it, mobile operators will be able to deliver faster downloads and better internet browsing.

The second, 150 MHz in the 3.4GHz band, is of critical importance to future phones and the roll out of 5G.

Read more: Six things you need to know about 4.5G... and yes, it is a thing

As proposed by Ofcom last November, BT will be excluded from bidding for the 2.3GHz band.

Meanwhile, an overall cap of 37 per cent will be placed on any one operator in the second. Given BT's dominance, the telecoms giant will be restricted in how much of the critical 5G spectrum it can snap up.

EE chief exec Marc Allera said: “While we don't agree that spectrum caps were necessary for this auction, our focus remains on investing in our network, using our existing and future spectrum to provide the best mobile experience for our customers across the UK. We look forward to bidding for additional spectrum in this auction.”

However, Three mobile lauching a stinging attack on Ofcom's plans.

Chief exec Dave Dyson said: “Ofcom’s proposal is a kick in the teeth for all consumers and in particular for the near-200,000 people who signed up to the 'Make the Air Fair' campaign.

By making decisions that increase the dominance of the largest operators, Ofcom is damaging competition, restricting choice and pushing prices up for the very consumers that it is meant to protect.

The mobile market is imbalanced and failing customers. Ofcom has shown little interest in tackling the problem. We will consider our response as a matter of urgency.

Ofcom Group Director of Spectrum, Philip Marnick ​said: "We take all our decisions in the interests of consumers.

"This auction will keep the airwaves fair by reducing the share held by the largest operator. It will include strong safeguards to maintain a healthy four-player market and allow mobile operators to acquire the airwaves they need to compete.”

Levelling the playing field?

(Source: Ofcom)

Because BT and Vodafone already own the largest proportions of the spectrum on offer, the cap will mean there is effectively no limit on what Three mobile, O2 or any other new entrant to the market can pitch to win.

O2 chief exec Mark Evans said: “The announcement from Ofcom falls short of our expectations but it is important we now press ahead with the auction quickly so that the spectrum can be obtained by operators that will deploy it for the benefit of consumers, businesses and ultimately UK plc."

Meanwhile, a spokesperson for Vodafone said: "​We welcome Ofcom’s announcement to commence the auctions this year.

"However, we also need to see Ofcom and the UK Government support a pro-investment approach to infrastructure investment more broadly to ensure networks can be built out quickly and efficiently."

Read more: In your back yard? O2 to prep London for 5G by wedging in 1,400 phone masts

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