Ofcom Gives Green Light to Spectrum Trading

Telecoms regulator Ofcom has given the UK’s mobile operators the go-ahead to trade the rights to the radio spectrum they hold, in a measure aimed at helping to increase mobile network capacity and deliver faster and more reliable mobile services for consumers.

There are 80m mobiles in the UK, more than 12.8m of which are smartphones, figures that are placing big demands on mobile spectrum. The new regulations, which cover spectrum at 900 MHz, 1800 MHz and 2100 MHz, aim, to give operators added flexibility, which could help them to meet some of these demands by enabling operators with a greater need for spectrum to buy spectrum from those who need it less.

Ofcom will be responsible for the administration of spectrum trades – publishing the details of proposed trades online, confirming that they are acceptable, and then issuing revised licences to implement the trades.

Initial reaction to the news has been largely positive. “Ofcom’s new regulations to allow operators to trade their mobile spectrum licences have been long awaited,” says James Walsh, senior associate at international law firm, Eversheds. “Spectrum licences are extremely valuable – the 3G spectrum auctions produced over £22bn in revenue for the UK government last decade. Allowing mobile operators to trade the mobile spectrum they have purchased is a key step in allowing them to treat spectrum as a fully realisable asset.

“The move is particularly interesting with 4G spectrum auctions planned for next year, although the 4G round is only likely to raise a fraction of the revenue obtained from the 3G auctions, partly because of the build obligations that Ofcom proposes to include in the relevant 4G spectrum licences, Ofcom’s current intention being to allow the new 4G spectrum licences to be traded as well. This will potentially make the licences more valuable to potential bidders than they would otherwise have been.”

But Shahar Peleg, director of product nanagement at Siklu Wireless Communications, says that, in order to provide a good mobile broadband experience to users, the capacity bottleneck in the mobile backhaul network will also need to be solved.

“The E-band spectrum has clear technological and economical advantages, and is expected to play a significant role in easing these backhaul constraints,” says Peleg. “Only a combined solution in the access and backhaul networks will allow mobile users to fully experience mobile broadband services, such as web surfing, emailing, video calls, media streaming and other data applications at their fingertips.”

You can read Ofcom’s statement in full here.