It's all go for 2.6GHz spectrum auctions (next year)

At least the UK Government and Ofcom have made up their minds (and fought of legal battles) and announced that the 2.6GHz chunk of spectrum (all 190MHz of it) will be auctioned at the end of 2011.

At the same time they'll auction off the old 800MHz spectrum which comes from the digital dividend. It's all prime spectrum as it has extremely good propagation characteristics i.e. it goes through walls well.

Ofcom at the same time will allow refarming of the 900MHz and 1800MHz GSM/PCN spectrum so that it can be used for 3G (or 4G/LTE) services, which is currently not allowed under the GSM laws. The existing 3G licenses (which expire in 2021) will be made indefinite with the licensees paying a yearly fee post 2021 to Ofcom.

BT was expected to bid for the 2.6GHz spectrum when it was originally meant to become available (late 2007/2008) but now it's likely they'll just expand their WiFi and MVNO offerings as the cost of the spectrum is expected to be extremely high and they're already spending a fortune expanding their fibre roll-out to most of the UK.

It's likely the spectrum will be snapped up by the existing Mobile Network Operators (MNOs) who will use it for high speed data services using LTE, though an outsider could come in and use it to offer wireless broadband or even 3G services of their own.

There's still a decision to be made on how the 900MHz spectrum (currently owned by O2/Telefonica and Vodafone) should be re-allocated and also the 1800MHz and 2.1GHz spectrum that Orange and T-Mobile own as they're now a single entity (in regulatory terms anyway) which means they own too much spectrum for a single network as per the 3G license.

So though it's a good move by the Government there's still a few issues to iron out, including the big issue of Ofcom itself as the Government is also trying to reduce spending on the Quangos that are currently in operation, Ofcom being a major one. Though licensing spectrum could be a big earner (especially the 2.6GHz and 800MHz chunks) which could pay for Ofcom for a few years.