European Communications

Last update03:28:10 PM

Operators get planning as UK’s 4G auction plans announced

Communications regulator Ofcom has announced plans for the UK's 4G spectrum auction, leaving operators with plenty of reading and time to formulate their strategies.

The auction process of two spectrum bands - 800 MHz and 2.6 GHz - is expected to start "as soon as possible" before the end of this year.

However, a legal document unveiled by the regulator will be subject to a consultation period that lasts until 11 September meaning the bidding process would not start until early 2013.

The regulator said it would be mid-2013 before operators would start to roll out 4G networks and later that year before they started offering services to consumers.

On Twitter, it defended itself against accusations that it delayed the auction.

"4G auction plans on track (reports today of “delay” are way off the mark)," it said. 

However, Informa’s Thomas Wehmeier said the timing put the UK “light years” behind global 4G leaders such as Korea.

The auction is set to offer 75 percent of the current mobile spectrum, which is 80 percent more than the 3G auction offered in 2000.

Ovum’s Matthew Howett said the auction would generate “ a mere fraction” of the amount the 3G equivalent achieved, but would nevertheless be “hotly contested”.

This is partly due to the fact that Ofcom is to reserve a minimum amount of spectrum in the auction for a fourth operator. 

"This could be either Hutchinson 3G or a new entrant altogether," it said in a statement.

A Three spokesperson said the operator was “working through the detail of this very substantial document”.

However, he did not seem unduly worried about the prospect of a new entrant.

“Obviously it depends on others, but we’re not seeing anyone else queue up to get involved,” he said.

Wehmeier said BT, Virgin Media, Sky and TalkTalk were all credible, if less likely, alternative bidders.

Instead, Three is focused on acquiring some low frequency spectrum to complement the higher frequency it already owns.

The company revealed today that its four million contract customers have more than doubled their data usage in the past 12 months to 1.1GB.

Vodafone, Everything Everywhere and O2 will fight it out for the main lots.

An O2 spokesperson told European Communications that Ofcom’s “detailed rules” represent “a significant step” towards 4G adoption. 

“Whilst Ofcom has taken a number of our suggestions on board, they are combined with other changes to the previous proposals,” he added. 

A counterpart at Vodafone UK added: “Ofcom appears to have created a mechanism to deliver the spectrum needed to run competitive 4G services and we welcome the work it has done.”

Both said they needed time to study the documents, which run to over 1,000 pages.

“We will obviously need to study today’s lengthy documents to make sure they deliver the fair and open auction that this country needs," the Vodafone UK spokesperson said.

Everything Everywhere is still hoping to get permission to launch 4G early in its existing spectrum holding at 1800MHz, but this was not dealt with in this auction document.

"The auction is only one step towards bringing 4G to Britain," it said in a statement.

"Everything Everywhere is committed to bringing 4G to the UK this year, and the next milestone will be the regulator’s response to our request to roll out 4G over our existing 1800MHz spectrum without further delay.”

Ovum’s Howlett warned that the timetable could still be delayed further if any operator launches a legal challenge.

Ultimately, Informa’s Wehmeier remained upbeat.

“UK mobile operators and consumers alike will benefit from the fact that 4G in late 2013 will be a more mature technology, providing major benefits in the shape of a more stable technology, a greater range of devices and significantly lower equipment costs due to increasing economies of scale,” he said.

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