Ofcom to Let Mobile Operators to Trade Spectrum

Communications regulator Ofcom has started a consultation on plans that would allow mobile operators to trade spectrum currently used for telephone calls, messaging and data browsing.

Now that over 12.8 million of the 80 million mobile phones in use in the UK are smartphones, Ofcom hopes that spectrum trading will help mobile operators manage the strain of increased traffic on the networks.

The plans will cover spectrum at 900MHz, 1800MHz and 2100MHz, and allow those with a greater need for increased capacity to make offers to those who have spare capacity to offload.

"This is an important milestone in the modernisation of spectrum management in the UK. It is a response to the innovation in the mobile communications sector, which is placing increased demands on spectrum," said Ed Richards, Ofcom chief executive.

"One important way of meeting this demand is making the acquisition of spectrum as flexible as possible."

Under the plan, Ofcom would act as the intermediary for spectrum trading, with the power to permit or reject trades.

Ofcom argues that the move could be vital to the UK's economy. In the consultation document it states: "Spectrum is a valuable and finite resource. Its use underpins about 3 per cent of UK GDP and is worth over £40bn a year to the economy."

It is likely that trading will ease strain on networks in the run-up to the release of the 4G spectrum, which is expected to be auctioned off in the first quarter in 2012.

Following the auction, the release of the 4G 800Mhz and 2.6GHz blocks will not be completed until the end of 2013.

Ofcom's document states: "The auction of 800MHz and 2.6GHz is likely to be the last significant opportunity for the next decade or so to acquire new spectrum suitable for the provision of mobile services, and mobile spectrum is likely to remain relatively scarce even after the auction, given the rapid increase in mobile (especially data) traffic."

The consultation is set to take six weeks, and trades are expected to begin in the summer.

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