Ofcom slaps £39m reserve on UK mmWave spectrum auction

UK comms regulator Ofcom has fired the starting gun on the UK’s first millimetre-wave (mmWave) spectrum auction.

On Wednesday it published proposed rules for the process of allocating frequencies in the upper and lower 26 GHz band, and the 40 GHz band.

The lower 26 GHz band constitutes seven lots of 200 MHz in the 25.1-26.5 GHz band, while the upper is comprised of five lots of 200 MHz spanning 26.5-27.5 GHz. The 40 GHz band has been divided into 15 x 200 MHz.

Ofcom has put a reserve of £2 million per lot of 26-GHz spectrum, and £1 million per lot of 40-GHz, which equates to an overall reserve price of £39 million.

“We are making large amounts of spectrum in the 26 GHz and 40 GHz bands (together, ‘mmWave spectrum’) available for new services, including 5G. The spectrum offers operators the opportunity to access very large contiguous blocks of frequencies, enabling innovative services and very high capacity and speeds,” said Ofcom, in a consultation document.

Ofcom said the licences will be subnational, with each one granting the licensee permission to deploy the spectrum in all major cities and towns – so-called ‘high-density areas’ – in which mmWave is expected to be put to use.

What this appears to acknowledge is that mmWave’s propagation characteristics are such that it doesn’t make sense to attach broad geographic conditions to the licences. This spectrum is for targeted, hotspot-type deployments to address capacity demand, not wide-area coverage. It also suggests that rural and remote areas are unlikely to benefit from 5G mmWave services in the near-term.

Ofcom also explained its reason for dividing the 26 GHz band into two categories of lots.

The lower chunk of the 26 GHz band is still being used for fixed links in or around high-density areas. That is expected to continue to be the case for around five or so years, precluding its immediate use for 5G. However, Ofcom is still keen to auction the whole 26 GHz band in one go, so it is giving operators an opportunity to identify and bid on frequencies they can use right away.

As has become the norm with spectrum auctions, there will be two stages. The clock auction, which decides the quantity of spectrum each bidder will be allocated. This will be followed by the assignment phase, which decides the precise frequencies allocated to each winner.

Of course, the great hope for mmWave spectrum is that it will shift the needle on UK 5G speeds.

According to Ookla earlier this year, median 5G download speeds in the UK were 129.1 Mbps at the end of 2022, down 38.3 Mbps from the year earlier. By comparison, 5G speed world leaders the UAE notched up 545 Mbps, ahead of South Korea on 493 Mbps. Admittedly, there are factors like population density and how it affects network deployment, but in terms of raw speed, there is big room for improvement in the UK.

Ofcom has opened a consultation on its proposed auction rules, so there might be some changes in the offing depending on the responses it receives. Interested parties have until 9 January to have their say.

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