Ofcom announces date for 800MHz and 2.6GHz auctions

Ofcom, the super regulator has announced that the auction for the 800MHz and 2.6GHz bands will commence on December 11th 2012.

The new regulations (pdf) covering the auction (know as a Standard Instrument) has been published and will come into force on November 23rd 2012.

Ofcom is proposing to auction the following lots: -

Lot Category	A(i)	A(ii)	B	C	D(i)	D(ii)	E
800 MHz 2x5 MHz	800 MHz 2x10 MHz (with coverage obligation)	1800 MHz 2x15 MHz (Divestment)	2.6 GHz 2x5 MHz (standard power)	2.6 GHz 2x10 MHz (shared low power)	2.6 GHz 2x20 MHz (shared low power)	2.6 GHz 5 MHz (unpaired)
Ofcom’s proposal	£225m	£250m	£225m	£15m	£3m per bidder, £30m threshold	£6m per bidder, £60m threshold	£0.1m

Lots A(i), A(ii) and C are suitable for generic mobile network operator LTE services, lot B is now irrelevant as EE have divested this spectrum to 3UK.

The low power bands D(i) and D(ii) are more suited to companies that have infrastructure and can offer femto cell type services (probably on a wholesale service to the main operators - for network offload), though new entrants could come in and offer innovative localised LTE services.

Lot E is probably suited to an operator who wants to offer broadband services (not using LTE which requires paired spectrum).

This means the minimum bid (if there only 1 bidder each for the low power license) is £499.1m, and if there are 10 low power bidders £580.1m. Obviously these are Ofcom's minimum bid values and the actual values could increase substantially.

Ofcom have also valued the 800Mhz significantly more than the 2.6GHz spectrum (as it has better propagation characteristics and therefore it's easier to cover large areas of population).

Ofcom agreed to move forward the auction after O2 and Vodafone threatened to take Ofcom to judicial review after allowing EE to offer LTE services on their 1800MHz spectrum, however O2 and Vodafone have no guarantees that they will win a license in either 800MHz or 2.6Ghz (though Ofcom can assess bidders not to be suitable to bid - but based on their stability etc).

Let the fun begin.

Ubiquisys makes a femto cell for less than $100

Ubiquisys have produced their "Femto-Engine" which has all the software needed for a femto cell and they also supply blueprints for any additional hardware that's required so original equipment manufacturers (OEMs) have all the information required to produce a working cell.

$100 has been a key price as this should enable mobile network operators (MNO) to bundle the femto cells for free with their service. Currently in the UK Vodafone sell their SureSignal femto cell for £50 (if the customer has a certain price plan for their mobile). In the US AT&T charge $150 for their microcell product.

There is a volume requirement to hit the sub $100 price, an OEM would need to order 100,000 in one go. Any MNO with any volume should be able to shift that kind of number easily, especially as it's highly beneficial to them as femto cells mean loading on their traditional networks is reduced.

These femto cells are only 3G units as it's much more difficult to produce 2G femto cells (and they require frequency planning), but it's the 3G traffic (i.e. mainly data) that is a real problem for the MNOs, so femto cells in the long term and as LTE comes into play are a no brainer.

Femto cells to be big?

Ubiquisys has just raised $11m as they expect the Femto cell market to explode.

Why is everyone so surprised? Femto cells in the home using the customer's broadband connection makes sense for the Mobile Network Operators (MNOs) as they remove some of the backhaul requirements which is an incredibly expensive operational cost.

As new data services are launched like HSPDA+ which offer 20Mb/s or so download speeds and eventually LTE (or even WiMAX) the backhaul requirements just get worse.

Currently the MNOs restrict the in-premise cells to just a few users, but in the future it's likely the femto cells will be given away for free, the customer gets "free" or greatly reduced call charges and free or cheap data. However at some point the MNOs will allow 3rd party users on to the cells for calls and data. They can then use in-home cells for micro fill and offloading traffic from the main cell sites.

This only is really practical for 3G femto cells as they will co-operate with neighbouring cells and not interfere on the radio side of things. Unfortunately 2G femto cells still need to be frequency planned which causes a nightmare if they are randomly deployed (unless they have their own spectrum to sit in, which is available in the old GSM Guard Bands - but of the MNOs only O2 has a low power guard band license).

Vodafone have taken the initiative in the UK and it's surely only a matter of time before the other operators follow suit with their own femto cell rollouts.