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.

2.6GHz spectrum Auction on again?

ZDnet has reported that the Government has sent proposals for 800MHz, 2.6GHz and 2G/3G bands to Ofcom, which could mean Ofcom holding an auction for the 800MHz and 2.6GHz bands later this year.

There has been controversy with various particulars of these spectrum auction with initially T-Mobile taking Ofcom to court saying the 2.6GHz band (which was reserved as an IMT-2000 i.e. 3G band in case the new 3G entrant failed) could not be allocated until 2G refarming had been sorted out. Currently the 2G bands are exclusively reserved for 2G use, naturally the Mobile Network Operators (MNOs) want to re-use 2G bands for 3G services. However refarming was fraught with further complications as Vodafone and O2 have 900MHz spectrum while T-Mobile and Orange have 1800MHz (1.8GHz) and 900MHz propagates better than 1.8GHz.

Things were further muddied when T-Mobile and Orange announced their merger (which has since been approved) as the combined company would have more than the maximum allowable spectrum.

Things have also simplified as the maximum spectrum a MNO can have has been increased from 2 x 60MHz to 2 x 90MHz, 2G spectrum will be allowed to be used for 3/4G services and licenses will become indefinite and tradable (the 2G licenses are currently set at 15 years). Also the 800MHz license will be awarded to 2 licensees, but they will have to give guarantees of 99% population coverage which should stimulate rural broadband.

Though 800MHz is optimal spectrum (it has extremely good propagation characteristics (and penetrates building well), BT are still thought to have an extreme interest in the 2.6GHz spectrum as this will allow them to offer WiMAX (or other wireless broadband) in rural areas and 3G services in urban locations.

Though the landscape is looking more positive, there may still be legal action from the MNOs as has occurred in other countries.