The frequencies 1781.7-1785MHz paired with 1876.7-1880MHz known as the GSM Guard bands have been made available to 12 licensees under the Wireless Telegraphy Act. They are national UK licenses, though the operators of the licenses will have to cooperate amongst themselves so that interference between themselves doesn’t occur. Ofcom expect the licensees to form an industry body that will self-regulate. Operators will also be required to register all radio equipment in the “Sitefinder” database (currently populated by the GSM and 3G operators).
Even though the licenses are only low power (sub 200mW compared to 10’s of Watts for traditional GSM systems), they are suitable for services such as in-building GSM, local area GSM (such as in a theme-park) or other constrained areas. There are 15 GSM channels available, each one being able to carry 8 voice calls i.e. 120 voice calls in total. Having a reasonable number of channels will allow multiple operators to co-exist in an area and also allow single operators to cover larger areas (in such a way that multiple GSM basestations won’t interfere with each other).
Though it is expected the main use will be low power GSM, Ofcom have not specified what the licenses should be used for and as such, can be utilised for any service, such as localised wireless broadband, as long as the GSM spectral masks are adhered to (which will ensure interference doesn’t occur with the existing GSM operators).
The 12 companies winning licenses and the prices they paid were: – (note all bids in GB pounds £)
|British Telecommunications PLC || 275,112|
|Cable & Wireless UK ( England) || 51,002|
|COLT Mobile Telecommunications Ltd || 1,513,218|
|Cyberpress Ltd || 151,999|
|FMS Solutions Ltd || 113,000|
|Mapesbury Communications Ltd || 76,660|
|O2 ( UK) Ltd || 209,888|
|Opal Telecom Ltd || 155,555|
|PLDT ( UK) Ltd || 88,889|
|Shyam Telecom UK Ltd || 101,011|
|Spring Mobil AB || 50,110|
|Teleware PLC || 1,001,880 |
Ofcom published the complete matrix of bids as the award was for between 7 and 12 licenses. It was a close thing at 8 licenses as a few bidders put in high entries for low numbers of licenses and dropped the amount as the license numbers increased.
Ofcom arranged the auction in a sealed bid process in a “what you bid is what you pay” arrangement, which lead to the lowest price paid as £50,110 by Spring Mobil and the highest £1,513,218 by COLT (30x as much). Some have argued that the highest bidders paid over the odds, but they are putting a good spin on it saying that it’s in-line with their mobile strategy. The total amount of the licence fees paid was £3.8million, not bad for Ofcom’s first spectrum auction.
Of course, compared to the license fees paid for 3G spectrum (around £6bn per license) it’s peanuts.
A license, but what to do with it?
Having a license is all very well, but now licensees must be wondering what they’ve got themselves into. Just because they can run a GSM service doesn’t mean anyone will use it, in fact it may well be difficult to get people onto your network.
It’s extremely unlikely the existing mobile operators are going to want to have anything to do with these new upstarts, they’ve invested millions (err, billions) to get to where they are today. The last thing they want is new entrants poaching customers or moving users off their networks when they move into, say, an office environment. They especially don’t want their customers doing it with equipment (i.e. handsets) that they’ve heavily subsidised.
Unfortunately, what this means is that the new players are going to have to issue new SIMs (Subscriber Identity Modules) and they won’t work on existing GSM networks, or users will manually have to select the new network when they’re in range. This makes it all very difficult, and users won’t bother if it’s hard.
New entrants could enter into roaming agreements with the current operators, but unless Ofcom mandates this (which is unlikely) there’s likely to be strong opposition. Since some of the license winners already have GSM networks, they can offer localised services knowing there’s no interference problems with existing infrastructure.
Deals with foreign GSM operators?
One way ahead is for a licensee to make an agreement with a foreign operator and the localised network just becomes an extension of their foreign network, but then when users roam on to the network they’ll be subject to roaming charges which, as both Ofcom and the EU Government know too well, can mean very high charges for the end-user. If roaming charges do decline then this may well be a way forward.
There’s also a big potential opportunity for the Channel Islands GSM networks here, as they abide by UK numbering plans, so though they are considered “foreign”, their numbers look like UK numbers, including mobile ranges. They could offer roaming agreements and even offer SIMs which would still look like UK numbers.
So the future’s bright, but it will be an interesting few years to see if any of the new entrants can really pull anything off.