ComReg reveals 4G auction results - €450m instant windfall for Irish Govt
ComReg has revealed the results of its 4G spectrum auction for Ireland, awarding lots to Hutchison 3G, Meteor, Telefónica (O2) and Vodafone, with fees adding up to €854.6m, out of which €450m will go into the exchequer this year.
The lots include the release of 140MHz of paired spectrum – double the 64.8MHz of paired spectrum currently assigned in these bands.
Meteor, Telefónica and Vodafone were awarded lots in the 800MHz frequency band while Hutchison 3G Ireland, Meteor, Telefónica and Vodafone were all awarded lots in both the 900MHz and 1800MHz frequency bands.
The winning bidders will pay €854.6m for the spectrum rights, including €481.7m in up-front fees along with annual spectrum usage fees totalling €372.9m paid in instalments until July 2030.
The licences will enable the operators to begin building out Long Term Evolution (LTE) or 4G services from early 2013.
Under the obligations of their licences, all operators must maintain a minimum coverage of 70pc of the population and meet this target within three years of receiving the licence. Quality of service conditions require that no network can be offline for more than 35 minutes within a six-month period.
“Making this spectrum available to operators in the Irish market will mean that Irish consumers will be able to avail of the next generation of mobile devices with increased speeds and data capacity due to the excellent propagation properties of this particular spectrum,” ComReg chairman Alex Chisholm said.
The announcement of the completion of the 4G auctions came sooner than most people expected, since the UK has only begun revealing details of its auction plans and it had been expected that the Irish auction process could have rumbled on until Christmas.
The news puts Ireland months ahead of the UK in terms of awarding licences. The UK regulator Ofcom has set 11 December as the provisional date for the submission of applications by bidders. Ofcom said the application will be reviewed throughout December and bidding will begin in January. In February/March, bidders will be informed what they have won and its cost and by March licences will be granted after the fees are paid.
But the ultimate question is when will services be available? Ireland's Communications Minister Pat Rabbitte, TD, estimates the first services could become available in 2013. In the UK, Ofcom anticipates services will be available by June 2013 and Everything Everywhere (EE) launched 4G services in 10 UK cities last month.
€450m boost to Irish exchequer
“The proceeds of the auction are greater than many people expected and are a statement of confidence in the economy,” Rabbitte said.
“The total licence payments of €845m are front loaded so over 50pc of the money (at least €450m) will go to the exchequer this year. The balance will be paid over by telecoms companies on a phased basis over the coming years.
“The outcome of this auction is to provide valuable spectrum for the rollout of advanced telecommunications services. The availability of spectrum in the 800Mhz band, for the first time, will allow telecommunications operators to provide new high-speed broadband services that were not previously available. This particular band was made available following the successful switchover from analogue to digital TV three weeks ago.
"I expect that the telecoms companies who were the successful bidders will move quickly to build the infrastructure so that we can start to benefit from 4G mobile broadband services in 2013. This will be an important dimension of Ireland's competitiveness in the coming years. It is a key component of the Government's National Broadband Plan, which envisages high-speed broadband services being rolled out across Ireland in the lifetime of this Government,” Rabbitte said.
Operator plans for 4G rollout
The largest allocation of spectrum went to Vodafone, which, having already invested €900m in its Irish network so far, plans to invest €500m in the next five years.
Vodafone Ireland CEO Jeroen Hoencamp said the spectrum capacity will enable Vodafone to provide data in urban areas and deliver mobile broadband coverage in rural areas from 2013.
“We now have the best possible combination of available spectrum and work has already commenced on upgrading our network nationwide. Our customers have access currently to the fastest data network and from next year, they will experience the next generation of mobile technology, 4G,” Hoencamp said.
Telefónica, which owns the O2 brand in Ireland says it it plans to commence the rollout of its 4G network in the first half of 2013. Telefonica Ireland plans to invest a further €200m over the next three years to upgrade its network to 4G capability, building on €1bn it invested in its network in the last 10 years.
Telefónica Ireland CEO Tony Hanway said, “Telefónica is committing significant investment to the introduction and roll-out of next generation 4G technology in Ireland. 4G will significantly change the way consumers use their mobile devices and will transform our ability to meet customer demand for new products and services as they move to adopt smartphones, mobile modems and tablets in ever greater numbers.
“Our plans for 4G will ensure Ireland remains at the leading edge of communications, providing customers with significantly faster data transfer speeds and much faster connections to the internet,” Hanway said.
Eircom CEO Her Bribar says its €145m purchase of spectrum under the Meteor brand forms part of the Group’s €1.3bn of capital expenditure over the course of its current business plan. He said work will commence immediately to utilise the newly acquired spectrum and rollout services which will be introduced within the next twelve months.
“The spectrum acquired is a great step forward for the Group. We already offer the country’s most ubiquitous fixed and mobile network. We will now support super fast mobile broadband, data and voice services for customers across urban and rural Ireland.
“Together with our fibre rollout, investment in LTE services, network investment is a critical pillar supporting the Government’s broadband vision and is fully aligned with the national agenda for economic recovery. The additional spectrum enables us to deliver our ‘always connected’ customer strategy.
“We will now offer faster broadband speeds together with new and innovative product bundles that are seamlessly underpinned by a range of fixed and wireless technologies to our customers,” Hribar said.
Three (Hutchison 3G Ireland) won a strong portfolio of spectrum at the lowest portfolio price of €51.14m. The allocation more than doubles Three’s current spectrum holding and the company says it will improve network coverage nationwide (indoor and outdoor), enabling speeds of up to 180Mbps.
“We are delighted with the outcome of the auction – it gives us the best of both worlds, a strong portfolio at the best price,” Robert Finnegan, CEO of Three Ireland explained.
“Our strategy was to acquire a flexible mix of spectrum that would allow us to continue to be Ireland’s leading high speed network at the lowest cost. This result will enable the roll-out of new technologies such as LTE with speeds of up to 180Mbps but also allows us to continue to invest in our network going forward.
“Three’s network was built for data, we do not have to support old GSM handsets and legacy technologies in the same way as the old networks, so we do not need the same mix of spectrum. The €51.14 million price tag means we are in a very good position to continue to offer the very best value to consumers and the best service,” Finnegan said.
Below: what next year might look like; a ping test from an iPhone 5 in London this morning using EE's 4G network, with thanks to Richard Illingworth
4G image at top via Shutterstock