UK telco BT (BT.A) shot to the top of the FTSE 100 leaderboard after securing vital new UK mobile spectrum for its 5G rollout strategy. The stock jumped more than 5% in early trading to 150.42p after the company said its EE mobile business had won 80MHz of 5G spectrum following an Ofcom auction.
BT splashed out a total of £452 million on the extra spectrum, about a third of the approximate £1.36 billion raised by the UK Government.
That’s roughly 10% of BT’s £4.3 billion EBITDA (earnings before interest, tax, amortisation and depreciation) last year from its relevant Consumer and Enterprise divisions.
Mobile peer Vodafone (VOD) spent £176.4 million on UK 5G spectrum, roughly 12% of its UK EBITDA last year.
EXPANDING 5G OPPORTUNITY
BT will pay £284 million for 60MHz of 700MHz spectrum and £168 million for 120MHz of spectrum in the 3.6 to 3.8GHz band. The 700MHz band is good for wide area coverage while the 120MHz works well in population dense urban areas.
The UK’s four major network operators (EE, Vodafone, 3UK, O2) will now move into an ‘assignment stage involving further bidding/negotiation to trade specific bands within 3.6 to 3.8GHz range,’ said Megabuyte analyst Philip Carse.
‘The full commercial terms will only be finalised at the end of this assignment stage of the auction,’ said BT.
‘This latest additional spectrum represents an 18% uplift in UK mobile capacity and will further support mobile network operator 5G rollout plans, albeit that these have been set back by the ban on use of Huawei equipment,’ said Megabuyte’s Carse.
