The bidding for 5G bandwidth can finally get underway, now the hold ups by EE and Three have been resolved.
Five companies are expected to bid for their share, including the four main mobile networks (EE, O2, Three and Vodafone) as well as a new player to the market, Airspan Spectrum Holdings – a US parent company looking to move into the European market following a successful gambit in Ireland.
5G will not only provide much greater speeds than the current 4G networks, but will also take Britain one step closer to Internet of Things ubiquity. With everything from cars and appliances to the humble lightbulb being connected to the internet, a great deal more bandwidth would be required than what is currently on offer.
This auction was originally planned for some months ago but was held up with legal challenges from EE and Three over potential caps. Ofcom, which will regulate the auction, stipulated that each company would be permitted to own no more than 37% of the total bandwidth offered. Three requested this be dropped to 30% (as it’s a somewhat smaller player with just 15% of the current network), whilst EE wanted to remove the cap altogether – no doubt influenced by it being the largest player with 42% ownership.
That said, O2 is expected to launch the biggest bid, as it’s thought to need the most of the four existing players. Forecasters believe that, if the company succeeds, it will make the company a more attractive prospect to buyers, with Spanish owners Telefonica reported to be considering a sell-off.
Whilst the government will be hoping for a bumper payday when the auction takes place, it may not reach the giddy heights of the 3G auction, where intense competition saw billions handed over for a spectrum share. This year’s auction has a total reserve of 70 million, though the final figure is set to be a fair bit higher.
This focus on 5G doesn’t mean 4G will soon be forgotten about for the much more attractive new option, though. In another auction scheduled for 2019, the government will put up additional space – with the caveat that buyers must pledge to improve existing 4G infrastructure too.
A spokesperson for Ofcom told bbc.co.uk: “To ensure widespread improvements in mobile coverage across the UK, we are proposing to attach coverage obligations to some of the licences. These obligations will require winning bidders to roll out improved mobile coverage in rural areas and the nations.”