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The bidding war for 5G spectrum in the UK begins
- The big four U.K. carriers (BT/EE, Three, Vodafone, and O2) will begin bidding today on government-owned 5G spectrum.
- Some 4G spectrum will also be for sale. However, since BT/EE owns most of the current 4G spectrum, it will not be allowed to bid.
- Although the government will make millions off this auction, experts agree that the bidding will not go as high as the original auctions for 4G and 3G spectrum.
The big four American telecommunications carriers are busy touting about the future of 5G, but that doesn’t mean that 5G isn’t a hot topic outside the United States as well. Over in the United Kingdom, bidding for the right to purchase 5G spectrum from the government begins today, with the U.K.’s version of the big four carriers ready to dish out millions for the highly-prized radio wavelengths.
BT/EE, Three, Vodafone, and O2, are the largest telecommunications carriers in the U.K. Each one wants to buy as much 5G spectrum as it can afford, but not just because it wants to lure in more customers. The United Kingdom has big plans for using 5G wireless as a way to connect municipal technology, such as driverless automobiles. The carrier with the most 5G spectrum will benefit most from those new programs.
The spectrum on offer is within two bands: 40 MHz in the 2.3 GHz band (which supplies 4G speeds), and 150 MHz in the 3.4 GHz band (which provides 5G). Right now, BT/EE owns a whopping 42% of the available 2.3 GHz band, so it is not allowed to bid on any of the new spectrum in that category. It also will only be able to bid on a maximum of 85 MHz within the 3.4 GHz spectrum.
Because owning 5G spectrum won’t have any immediate effects (since no commercially available devices can yet take advantage of the spectrum), people familiar with the bidding process don’t expect to see a bidding fervor like the U.K. saw with the sale of then-brand-new 4G spectrum or the absolute pandemonium seen in the original auctions for 3G spectrum. The bidding for 3G spectrum nearly two decades ago raised £22.5 billion for the U.K. government.
After this sale is complete, the U.K. government will do another auction in the second half of 2019. That auction will involve spectrum in the 700 MHz band. However, there will be a caveat for carriers to participate in the auction: only companies who improve their 4G coverage will be able to bid. It is not clear what metrics will be used to determine which companies will be able to participate in the bidding.
Already, 5G tests are proving that the entire mobile industry will be transformed once it is widely available on a stable network. Qualcomm demonstrated that even with real-world factors taken into account, 5G would be nearly 100 times faster than the top 4G speeds we currently enjoy. In the United Kingdom, visitors of the O2 Arena and surrounding district will be able to test out 5G speeds starting sometime in the second half of this year.