UK defense ministry to sell WiMax spectrum to buy ships

Operators wanting to launch WiMax services in the U.K. could get hold of valuable spectrum this year, as the U.K.'s Ministry of Defence sells it, to raise funds to buy ships.

The U.K. regulator Ofcom has said it will allow the U.K. public bodies to re-sell spectrum licences which could be worth up to £20 billion (US$40 billion), according to an Ofcom-commissioned audit. Government bodies have about half the useful spectrum below 15GHz, and the MoD owns about a third of that public sector spectrum. This is vastly more than it needs, and includes prime bands around 2.7GHz and 3.5GHz.

Selling this spectrum could help the MoD, with issues such as a £4 billion project to build two aircraft carriers, which was approved by the government last July but is now expected to be delayed due to cuts. The process will not be run by Ofcom, so the timescale is not yet clear, but the MoD is consulting in May on plans to release a "significant" amount of its spectrum.

This is a "great idea," says Dean Bubley of Disruptive Analysis. "Typically, these organizations have so much [spectrum] that they don't have any particular incentive to use it particularly efficiently. But at the same time, they'll push very hard indeed if there's any threat of it being taken away from them."

Ofcom has not been able to get specific bands back for auction in the past, but has now given the MoD an incentive. "Given budget constraints for the military in particular, the notion of investing a small amount in optimizing their usage of existing spectrum, could mean they could sell enough of what is 'spare' to buy another aircraft carrier, or better equip troops for ongoing conflicts."

Ofcom will consult on the details of its new regulations for public spectrum trading this summer, to make sure that national security and public safety aren't harmed.

"Public bodies and the MoD in particular hold some of the most valuable and sought-after radio spectrum," said Ed Richards, chief executive of Ofcom. "By working with these organizations we are enabling them to trade and release this spectrum which will create new opportunities for the development of wireless services for the whole country."

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