UK operators trade 5G midband spectrum

Vodafone and O2 trade for proximity. EE has a split holding but says that's fine for now. TMN has the details.

Vodafone and O2 have traded midband spectrum to give each other more useful spectrum holdings in the 3.4-3.8GHz bands.

The trade follows the completion of the second stage of the midband in the UK, with regulator Ofcom awarding spectrum at the higher end, from 3680 MHz to 3800Mz.

EE, Vodafone and O2 each got 40MHz within the new tranche. EE got the lowest 40MHz, from 3680-3720. Vodafone got the middle 40MHz and then O2 was awarded 3760-3800MHz.

The situation before the most recent auction. The new spectrum is in the grey area.

However, all these operators already hold spectrum lower down in the overall 3.4-3.8GHz band. If you look at the slightly fuzzy image above, you can see that Vodafone held the light blue 50MHz from 3410-3460. Telefonica had the green 40MHz at 3500-3540 and EE had darker blue 40MHz at 3540-3580MHz. (The grey area is the new spectrum that has just been awarded.)

So Vodafone and O2 have done a deal. Vodafone will give up its 40MHz in the grey area of 3720-3760Mz and hand that to O2. That will give O2 an unbroken 80MHz in that part of the band, running from 3720-3800MHz.

Meanwhile, Telefonica will give Vodafone its “green” 40MHz between 3500-3540MHz. That now gives Vodafone two blocks of 50MHz and 40Mhz, separated by the 40MHz that belong to Three.

Vodafone described this situation in a press release as “good proximity”.  TMN understands that means that it can span the two bands from its existing 5G radios, rather than having to deploy new equipment to take in the new band. In essence, that’s the benefit of contiguous spectrum – being able to deploy in a band from the same radio. Most modern 5G radio units have an OBW (Occupied Bandwidth) of 200MHz, effectively the range that a unit can operate within.

EE, meanwhile, now has its existing 3540-3580MHz (dark blue) chunk from the first auction and its new allocation up at 3680-3720MHz. The 100MHz separating those two bands in the middle belongs to Three (much of it coming to Three when the operator bought fixed wireless operator UK Broadband).

So the easiest way for BT to get a contiguous band together – if it wants to do so – would be for Three and BT to agree that BT takes the lower 40MHz of Three’s band from 3580MHz upwards, or as close as possible to it. EE may not be fussed about that middle 100MHz, Three may not want to play. In theory 5G radio units with 200MHz OBW could span across BT’s blocks at 3540-3580MHz and 3680-3720. (And just to add, shortly after this article went live, BT confirmed to TMN: “We will only have one radio (per sector) on a site to deliver both carriers.”)

TMN asked BT if it envisages a trade to get its spectrum closer together, and while it is keeping its options open, it doesn’t look as if a trade is on the cards. Here’s BT’s statement to TMN, which also casts a little shade on Vodafone and O2, for good measure (italics are TMN’s). It is suggesting that Vodafone and O2 may take a little time to sort of the transfer and coordination of the traded bands.

BT has doubled holdings in the 3.4-3.8 and has a strong overall spectrum portfolio to continue to deliver industry-leading performance in 5G. BT retains the flexibility to agree a future spectrum trade to make the holdings contiguous.

As further background, contiguous spectrum offers some advantages in terms of cost and efficiency but a deal would have also made the rollout of new spectrum more complex. Those who did a spectrum trade deal may have to wait to use the additional spectrum in some areas, given the need to coordinate their respective change of bands. This process will take time.”

In its public release today, EE seemed happy enough, although it elided over the fact that its 80MHz in the 3.4-3.8GHz band is split apart. It said, “EE has already carried out work on a number of sites to allow the new spectrum to launch soon…” and also that “EE will shortly begin the roll out of additional 3.6GHz capacity across the UK for its 5G customer base.”

That would tend to suggest that it is accepting its lot and cracking on.

How EE chose to portray its spectrum. Note the 3.4-3.8GHz band is depicted as one block, although it is in fact split across two separate holdings, with 100MHz of Three spectrum sitting in between.