BT will not be allowed to bid for 2.3-GHz spectrum at Ofcom's next auction, under proposals published by the U.K. telco regulator on Monday.
Ofcom intends to auction 190 MHz of frequencies next year, consisting of 40 MHz in the 2.3 GHz band and 150 MHz in the 3.4 GHz band.
In a new consultation, the watchdog has proposed to cap the volume of 'immediately usable' spectrum that any single operator can own at 255 MHz.
For BT and its EE arm, which currently hold a combined 45% of the U.K.'s available mobile spectrum, this means they would not be able to bid for any 2.3-GHz spectrum. Following the 2.3-GHz auction, BT and EE's combined spectrum share will fall to 42%.
"The U.K. has long benefited from strong mobile competition. We are designing the auction to ensure everyone benefits from a market that continues to innovate and serve them well," said Philip Marnick, the director of Ofcom's spectrum group, in a statement.
Ofcom is not planning to cap the amount of 3.4-GHz spectrum that any one player can bid on.
"We expect this band to be an important enabler of 5G deployment, and it is possible that 5G networks will require access to large blocks of contiguous spectrum," Ofcom said, in its consultation document. "Exactly how operators deploy 5G networks is currently uncertain, but we believe there to be a material risk that over-specifying limitations on spectrum holdings at this point might constrain an operator's ability to innovate."
Monday's proposals disappointed 3UK, the country's smallest mobile operator, which has been lobbying for a 30% cap on the volume of spectrum that any single player can hold.
"The mobile industry is failing customers and Ofcom has showed it has no interest in addressing that," said 3UK CEO Dave Dyson, in a statement emailed to Total Telecom.
"A 30% cap on total spectrum ownership and a spectrum reservation for smaller operators are the only measures that will preserve competition for the benefit of U.K. mobile consumers," he insisted.
Ofcom's consultation will close on 30 January 2017.
"Expect today's announcement to be just the start of another round of wrangling and protestation