UK to auction off more radio spectrum to boost 4G capacity and raise at least $79 million

British mobile carriers and their customers should get more capacity in the coming years – the country’s communications regulator, Ofcom, has launched a consultation (PDF) on the auction of valuable radio spectrum that’s already being used for mobile broadband in countries such as India, China and Australia.

All going well, the spectrum will go up for auction in late 2015 or earlier 2016. It includes 40MHz of spectrum in the 2.3GHz (2350-2390MHz) band, and a chunky 150MHz of spectrum in the 3.4GHz (3410-3480MHz and 3500-3580MHz) band – just the sort of high-capacity spectral territory you’d want to exploit in dense, urban deployments, or to use for backhaul.

According to a statement by Ofcom spectrum group director Philip Marnick:

Today marks an important step in ensuring that the U.K. has sufficient spectrum to support our wireless economy. It comes in response to the fast pace of change and innovation taking place in the communications sector, which is placing increased demands on how spectrum is used by all industries. One important way of meeting this demand is making new spectrum available and its use as flexible as possible.

Ofcom is taking a user-neutral approach to the auction, though as many handsets already support 2.3GHz 4G in some territories – Apple’s iPhone 6, for one – using it for LTE would be something of a no-brainer. (It may be worth noting that, in the U.S., AT&T wants to use its 2.3GHz spectrum for in-flight connectivity.)

Currently, the spectrum is mostly in the hands of the Ministry of Defence, which has agreed to give it up almost everywhere, except for Northern Ireland and islands off the north-west of Scotland (in the case of the 2.3GHz spectrum) and the Channel Islands and the Isle of Man (in the case of the 3.4GHz spectrum.)

40MHz of 3.4GHz spectrum is also licensed by a firm called UK Broadband, which provides 4G-based services to homes and businesses, and Ofcom is considering bringing this into the wider pot so that all licensees can get the benefits of contiguous spectrum (UK Broadband included).

The auction should raise at least £50 million ($79 million) for the Treasury. Taking the sums paid in 2013’s 2.6GHz LTE spectrum auction as a benchmark, Ofcom is proposing a reserve price of £2.5 million to £5 million for each 5MHz lot in the 2.3GHz band, and £1 million for each 5MHz lot in the 3.4GHz band.

There will be constraints on how much spectrum the carriers EE and Vodafone will be able to buy, given that they have so much already and Ofcom has to maintain competition. This will take the form of a 310MHz (or 37 percent) cap on any one company’s total holdings.