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4G auction winners could sell spectrum

Ofcom has moved to allow winners in the recent 4G auctions to trade spectrum. Operators will be allowed to buy and sell bandwidth from April.

The regulator said the move has come about following feedback to proposals to trade spectrum back in January. It said that having considered the responses to its proposal decided to make two “statutory instruments on 18 March 2013”.

One non-confidential response came from 3UK that Ofcom said “in general they [3UK] supported Ofcom’s proposals to make licences for the Bands tradeable”.

Read Recombu Digital’s guide to 4G broadbandReports in the FT last weekend said that the auction had produced “some jaw dropping outcomes”, the paper was told by one unnamed participant in the auction.

The report said that the allocation of spectrum to the operators, Vodafone, EE, O2, 3UK and BT, would produce a situation where some operators have too much of the wrong spectrum while others will suffer a capacity crunch. Both situations could lead to degradation on 4G services felt by customers.

At the time of the auction, Ofcom said that spectrum trading would be unnecessary for 4G as the “ auction achieved our stated aim of delivering a highly efficient and competitive outcome in the allocation of LTE spectrum,” it said. “This is clearly reflected in the bids that took place during the auction, which we will publish shortly.”

The auction meant that EE and 3UK got around the same amount of spectrum in the 800MHz band. EE also got spectrum in the 2.6GHz band while 3UK got none. Such situations could now lead to spectrum horse trading as operators seek to maximise investments and make sure that customers aren’t left with a poor service in some areas of the UK.

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