UK regulator Ofcom offered discounts of up to £400 million on the cost of spectrum licences in the next UK auction on the condition operators agree to meet a series of rural targets requiring significant financial outlay.
The auction, set to take place by early 2020, is for licences in the 700MHz band and 3.6GHz to 3.8GHz range. It will have a number of binding obligations attached, potentially including spectrum caps.
In its draft auction rules, Ofcom said two operators could receive the discount, but must commit to meet three targets within four years: provide “good” outdoor data coverage to at least 90 per cent of the UK’s land mass; improve mobile coverage for 140,000 buildings; and install 500 new masts in rural areas.
Ofcom added in return for agreeing to the requirements the winning bidders would receive a discount of between £300 million and £400 million “to reflect the significant investment required to meet them.”
Operators are free to bid without agreeing to these terms, but will still have to meet other obligations as part of their licences.
The terms of the auction, which will be the country’s second for 5G-suitable frequencies, are now under public consultation. Alongside the spectrum proposals, Ofcom also published suggestions for IoT spectrum sharing initiatives.
Connected nation report
Ofcom’s move to boost nationwide connectivity is part of a long-standing aim from the regulator and government. Earlier this year, Ofcom CEO Sharon White priced complete UK coverage at £6 billion, while politicians also regularly bemoan the state of coverage in rural areas.
In the latest edition of the regulator’s Connected Nation report, released today (18 December) alongside the draft auction consultation, Ofcom said 77 per cent of homes and offices could receive a good indoor 4G signal from all four operators as of December 2018 compared with 65 per cent in December 2017.
Coverage across the UK’s land mass also improved during 2018. A “good” 4G signal from at least one operator was available in 91 per cent of the country’s land mass in December 2018, up from 80 per cent. Currently, 66 per cent had good 4G from all four operators compared with 49 per cent in 2017.
However, it also noted: “too many rural areas are left with patchy or unreliable mobile reception” adding some areas still had no coverage at all.