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4G auction winners are announced by Ofcom

by Mark Tyson on 20 February 2013, 11:00

Tags: Ofcom, Everything Everywhere, Three (HKG:0013), Vodafone (LON:VOD), O2/Telefonica (NYSE:TEF), British Telecom (LON:BT.A)

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Ofcom has announced the winners of the 4G mobile spectrum auction. Following over 50 rounds of bidding; “Everything Everywhere Ltd, Hutchison 3G UK Ltd, Niche Spectrum Ventures Ltd (a subsidiary of BT Group plc), Telefónica UK Ltd and Vodafone Ltd have all won spectrum.” Ofcom says the result is “suitable” for the purpose of rolling out superfast mobile broadband services to customers and businesses and will promote strong competition in the 4G market.

(Almost) Everyone will get 4G coverage by the end of 2017

Ofcom expects that thanks to the auction end users will get faster, cheaper and more innovative 4G connectivity offerings with better coverage. It predicts that “almost the whole UK population will be able to receive 4G mobile services by the end of 2017 at the latest”.

In a statement Ed Richards, Ofcom Chief Executive said “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. We are confident that the UK will be among the most competitive markets in the world for 4G services.” This should be true as currently UK mobile phone contracts are some of the most competitive in the world.

Mr Richards adds that 4G coverage “will extend far beyond that of existing 3G services” and cover 98 per cent of the population indoors. He also said that Ofcom will be conducting research at the end of this year to judge the state of the market and inform mobile customers.

The auction results, a breakdown

Winning bidder

Spectrum won

Base price

Everything Everywhere Ltd

2 x 5 MHz of 800 MHz and
2 x 35 MHz of 2.6 GHz

£588,876,000

Hutchison 3G UK Ltd

2 x 5 MHz of 800 MHz

£225,000,000

Niche Spectrum Ventures Ltd (a subsidiary of BT Group plc)

2 x 15 MHz of 2.6 GHz and
1 x 20 MHz of 2.6 GHz (unpaired)

£186,476,000

Telefónica UK Ltd

2 x 10 MHz of 800 MHz
(coverage obligation lot)

£550,000,000

Vodafone Ltd

2 x 10 MHz of 800 MHz,
2 x 20 MHz of 2.6 GHz and
1 x 25 MHz of 2.6 GHz (unpaired)

£790,761,000

Total

 

£2,341,113,000

The following bidders were not winning bidders; MLL Telecom Ltd, HKT (UK) Company Ltd.

It is estimated that the winning auction bidders will be able to start rolling out new 4G services “in spring or early summer 2013”.

The Ofcom auction results statement concludes with a reminder of the upcoming possibility of a capacity crunch”. With the real possibility of mobile data use being 80 times greater than current usage by 2030 Ofcom is now planning to support the release of further spectrum to be used for 5G mobile services.



HEXUS Forums :: 19 Comments

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£2.3 billion, not bad revenue for a piece of paper (probably really a vague PDF) allowing you to send something invisible through thin air... wonder how much profit there was in that that'll end up in the treasury and how much Ofcom splurged on the bidding process and associated "business functions".

No surprises in the winners really. Roll on better data coverage, I couldn't give a stuff about the raw speed, I'd prefer to get 5-10Mb uninterrupted everywhere (including the countryside, where the trains spend most of their time and there are few signs so sat-nav matters) than 100Mb in the towns.

Edit: that woman in the picture is a bad advert for 4G - that just says 4G ruins your hair and makes you look like a cheap sci-fi monster.
Those bids are far lower than the 2100MHz bids: http://www.solwise.co.uk/3g-intro.htm [solwise.co.uk]
In fact, all these bids combined don't even come close to one of the 2100MHz bids.

And the government have already announced how they intend to spend the money gained. The bids ensure operators don't sit around forever rolling out new services - they've just invested a lot of money so they need to get a move on before the competition takes away a lot of their business/money which would be very hard to regain.
kingpotnoodle
£2.3 billion, not bad revenue for a piece of paper (probably really a vague PDF) allowing you to send something invisible through thin air... wonder how much profit there was in that that'll end up in the treasury and how much Ofcom splurged on the bidding process and associated "business functions".

No surprises in the winners really. Roll on better data coverage, I couldn't give a stuff about the raw speed, I'd prefer to get 5-10Mb uninterrupted everywhere (including the countryside, where the trains spend most of their time and there are few signs so sat-nav matters) than 100Mb in the towns.

Edit: that woman in the picture is a bad advert for 4G - that just says 4G ruins your hair and makes you look like a cheap sci-fi monster.

You say as if they're selling "nothing" for free, but the reality is that there's a million different uses for the spectrum and if it was just a free for all, nothing would work. It seems pricey, but really it's the price you pay to ensure that you get a chunk of a very finite resource without anyone else using it.
The results are quite surprising to me.

That's a lot of spectrum for EE (they now have 105MHz in total), and it looks like O2 got mugged.

It will be interesting to see what NSV do with that spectrum, since the business plan from BT is unclear. Not enough for them to deploy mobile Broadband and worry the incumbent operators. Maybe they'll share with O2...?

Vodafone have done well, but then they have forked over the lions share.
Wow that is surprisingly cheap - well under expectations and although it was obviously going to be well under the pricing paid for 3G (since current LTE systems are exclusively for data transfer - all current LTE phones in the UK drop back to 3G for voice)...its still peanuts really.

Lets see how this changes the market - I predict that initially we'll have the same situation as with EE, so a huge premium and tiny tiny data limits, but in a couple of years time who knows.

Biggest question is what will BT do with theirs...