The regulator's new plans bring the Shared Rural Network, proposed by the UK's mobile operators last week, a step closer.
Ofcom says the released airwaves will help improve coverage, boost network capacity and support the rollout of 5G.
The update is to the auction rules Ofcom proposed in December 2018, which would have given operators a discount at the auction in return for a commitment to increase coverage in rural areas.
Since then the four mobile network operators – BT/EE, O2, Three and Vodafone – proposed an alternative plan to Ofcom and the government for a Shared Rural Network that would deliver good quality 4G coverage to at least 92% of the UK over six years.
Last week the government announced it was in favour of their target, which they would fund jointly so long as the government committed up to £500 million in addition to offset the cost providing infrastructure to the hardest to reach places.
The operators also insisted that Ofcom dropped its proposed 5G coverage obligations in return for discounted prices in the upcoming spectrum auction, which Ofcom has now agreed to do.
It said in a statement, “This is because, through the companies working together, the agreement will achieve higher coverage than the requirements we could have set through an auction”.
Now the auction, to be held next year, will offer spectrum in two frequency bands:
• 80MHz of spectrum in the 700MHz band which are suitable for indoor and outdoor coverage across very wide areas, including rural ones. These airwaves will also boost the capacity of today’s mobile networks.
• 120MHz of spectrum in 3.6-3.8GHz band, which “are part of the primary band for 5G and are capable of carrying lots of data-hungry connections in concentrated areas. All four of the biggest mobile companies have launched 5G this year, and releasing these airwaves will help increase the capacity and quality of mobile data services”.
How the auction will work
Ofcom plans to use a format known as ‘simultaneous multiple round ascending’ for the auction, as it did in the 2018 spectrum auction, which involves two stages:
• Principal stage in which companies first bid for airwaves in separate ‘lots’ to determine how much spectrum each company wins.
• Assignment stage, in which there is a round of bidding to determine the specific frequencies that winning bidders will be allocated.
Winners of 3.6-3.8GHz spectrum will have an opportunity within the assignment stage to negotiate their placements within the band among themselves.
Ofcom claims this will make it more straightforward for bidders to join together the new spectrum they win with their existing holdings, and potentially reduce the level of ‘fragmentation’ in the wider 3.4-3.8GHz band.
The regulator has asked for responses to the new proposals by 9 December, and plans to publish its final decisions in early 2020, before starting the auction in the spring.