LONDON Britain's communications and media regulator Ofcom has opened up the possibility of another specrum auction as it revealed plans to open some of the 900 MHz bands to more efficient use and increasing competition in mobile services.
The regulator is suggesting that some spectrum currently used for 2G networks by Vodafone and 02 be freed up and used for higher data rate networks by other operators. The two operators would, Ofcom says, retain "most" of the spectrum for their own networks.
The amount of spectrum to be released should be sufficient to allow three extra operators to access the 900MHz band, Ofcom suggests, greatly increasing the opportunities for chip suppliers and mobile handset and infrastructure makers.
The move is part of a wide ranging consultation by Ofcom to "support innovation and competition" in mobile technologies by promoting more flexible use of the spectrum. The aim is to improve rural coverage, speed the uptake of mobile broadband and improve indoor coverage.
The consultation is just starting and any auction of freed up frequencies could be held as early as 2009, with new services scheduled to start a year later. The regulator suggested the economic benefit of liberalizing the spectrum could be about £6 billion for the U.K.
It added most of these benefits would flow from more efficient and flexible use of the 900MHz band.
The proposals are in line with European Commission plans to remove restrictions from 2G spectrum across Europe. The EC proposed in July to repeal long-standing European regulations on using frequency bands that are currently employed for the GSM network.
The aim was to allow European network operators to use the 900MHz and 1800MHz bands more efficiently, increasing the number and choice of wireless services available and expanding their geographic coverage.
The four operators in the U.K that have both GSM and 3G networks, Vodafone, Orange, O2 and T-Mobile , are likely to welcome the move to remove restrictions on their 2G licenses. They would still retain a majority of the old 2G spectrum and could use it to expand their high-speed services at little extra cost. The companies have been lobbying the regulator for permission to "re-farm" this existing spectrum for some time.
The 900 MHz band is used by Vodafone and O2 only; 1800 MHz is used by all four of Britain's 2G operators.
The fifth operator, Hutchison 3G, does not have a GSM network. Between them the five paid £22.5 billion in auction during 2000, but if the plans go ahead, as expected, the auction will raise siginificantly less for the Treasury.
Ofcom points out that future 3G services rolled out using 900MHz would require far fewer mobile phone masts than if higher frequencies were used. It suggests it would be possible to build a high quality mobile broadband network covering 99 per cent of population using around 10,000 fewer sites per operator.
Ofcom also proposes to remove technology-specific restrictions on the use of the 1800MHz band as soon as possible, and to make licenses tradable, giving the current holders the option to transfer rights to use the spectrum to others. These changes could take place in 2008.
Similar changes could also be applied to the spectrum band currently used for 3G services, at 2100MHz. Licenses for this band are currently held by Vodafone, O2, T-Mobile, Orange and Hutchison 3G.