02/02/2011

Ofcom wants to allow mobile operators to trade spectrum

Ofcom is holding two related consultations, the first is to allow mobile operators to trade spectrum in the 900MHz, 1800MHz (1.8GHz) and 2100MHz (2.1GHz) bands, the second is to vary the Wireless Telegraphy Act so that the 3G licenses can be changed to support a new coverage obligation, a change to licence duration, a revocation notice period of 5 years (such revocation not to be capable of taking effect before the period for which the licences were auctioned expires), a provision for Ofcom to charge annual licence fees from the end of 2021 (when the period for which the licences were auctioned expires) and a provision relating to spectrum trading.

The are many reasons to allow spectrum trading which benefit the UK as a whole especially financially as spectrum licenses generate around £40bn per annum for the UK (and account for around 3% of the GDP). Spectrum trading has also been directed from Government.

This will also allow Everything Everywhere (the combined Orange and T-Mobile) to effective get rid of 2 x 15MHz pairs of spectrum from their 1800MHz allowance, which was agreed with the EU as part of the merger conditions. Everything Everywhere will be able to trade directly, as part of the digital divide spectrum (800MHz and 2.6GHz) or give it back to Ofcom who can re-award it.

This is likely to have a major impact when the 800MHz and 2.6GHz licenses are awarded as some entities may have a large chunk of additional spectrum (though companies such a 3 are hoping that there will be sub 1GHz spectrum caps) and can therefore free-up existing mobile spectrum.

The spectrum trading consultation may be responded to here and the WTA variance consultation here.