UK telecoms regulator Ofcom raises stg£2.34bn in 4G auction

20 Feb 2013

The UK’s telecoms regulator Ofcom has raised stg£2.34bn from its auction of 4G mobile spectrum. The UK government had hoped that the auction would have raised stg£3.5bn for the Treasury.

Ofcom announced the winning bidders as being Everything Everywhere, Hutchison 3G UK, Niche Spectrum Ventures, a subsidiary of BT, Telefónica and Vodafone.

The auction raised stg£2.34bn for the public purse in the UK, but the government had hoped to raise stg£3.5bn from mobile phone companies looking for more bandwidth.

The 4G mobile spectrum auction has been the largest sale of wireless airwaves in the UK since the 3G auction in 2000, which raised stg£22bn.

A total of 250MHz of spectrum was auctioned in two separate bands – 800MHz and 2.6GHz.

Ofcom said this is equivalent to two-thirds of the radio frequencies used by wireless devices such as tablets, smartphones and laptops.

It anticipates that 98pc of the UK population will be able to receive 4G mobile services by the end of 2017 at the latest.

“This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country,” said Ofcom chief executive Ed Richards.

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

The winning bidders have until Thursday to pay Ofcom for the spectrum they have won.

Ofcom expects the new 4G services will go live in spring or early summer 2013.

It also anticipates that, by 2030, demand for mobile data in the UK could be 80 times higher than it is today. Ofcom said it is also planning to support the release of further spectrum for possible future ‘5G’ mobile services.

Matthew Howett, a telecoms regulation analyst at Ovum, said the results of the auction was positive news for mobile operators.

“For the mobile operators there must be widespread relief that the amount paid is a mere fraction of the stg£22.5bn they were asked to cough up during the 3G licensing process,” he said. “For them, the fact they didn’t have to pay billions more is without doubt a positive thing.”

4G spectrum image via Shutterstock

Carmel Doyle was a long-time reporter with Silicon Republic