Ofcom announces 4G auction results

Total cash raised falls well short of expectations
Darren Allan

February 20, 2013
Ofcom Logo

The bidding for the 4G LTE spectrum in the UK, as organised by Ofcom, has finished, and all the major operators now have a piece of the pie, not just Everything Everywhere (EE).

EE did, however, carry off more spectrum, alongside Vodafone, O2, Three and BT. Two bidders failed to secure any spectrum, namely MLL Telecom Ltd and HKT (UK) Company Ltd.

The biggest bidder was Vodafone, which stumped up £790 million to secure big slabs in both the 2.6GHz and 800MHz spectrum.

Next in line was EE, which bid £590 million to pick up 800MHz spectrum, and two slices of 2.6GH – keeping it ahead of Voda as the most advanced LTE operator (which it is currently, due to the fact that it’s the only operator with large dollops of its own 1800MHz spectrum).

O2 was close behind, paying out £550 million for just 800MHz spectrum.

Then came the more minor bidders, with Three putting up £225 million for 800MHz spectrum, and Niche Spectrum Ventures Ltd, a subsidiary of BT, paying out £185 million for three chunks of 2.6GHz spectrum.

The total amount Ofcom took, and will be passing onto the government, is £2.3 billion – just a tenth of what the 3G auction raised over a decade ago. And unfortunately, it’s also well short of the anticipated target of £3.5 billion, and not good news for the government’s balancing of the UK’s suffering books.

Ed Richards, Ofcom Chief Executive, said: “4G coverage will extend far beyond that of existing 3G services, covering 98 per cent of the UK population indoors – and even more when outdoors – which is good news for parts of the country currently underserved by mobile broadband.”

Indeed, mobile LTE could be something of a lifeline for those in rural parts of the UK, who may find they can get a much faster mobile connection than a fixed line – until BT starts to sort the (subsidised) roll out of fibre to the “final third” of the country.

So when will you have a choice of which 4G LTE operator to go with? Come the start of the summer; that’s when the UK’s 4G game will cease to be EE-only – and we can expect some far more competitive pricing than EE has offered thus far.

Three, for starters, has pledged to offer its 4G at no extra cost across its range of tariffs, for both new and existing customers. As new 4G capable phones become more widespread, that could well see it pick up market share and begin to catch the big players.


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