Virgin Mobile is considering throwing its hat in the ring for the forthcoming 4G auction, describing that element of the spectrum as a ‘critical part’ of its future business.
Rivals said Virgin’s move came as a surprise as Three was generally seen as the likeliest fourth operator to purchase 4G spectrum.
One rival operator said: ‘It would be a real shock if Virgin came in for the 800MHz band, but competing in the auction is what you would have to do to turn yourself into a real player. Virgin Mobile is not exactly a substandard player, but if they were looking to build a proper network, why not buy Three?’ Another said: ‘I would be very surprised if it needed a national network for its business as it is very expensive to build.’
Virgin Media’s director of mobile Jamie Heywood told Mobile the potential grab was sparked by greater demand for data among its customers. He said: ‘We’re seeing growth on mobile data of around 20-25% per quarter, which is a number not unique to us. I think what we are also seeing is customers moving across the networks and taking advantage of what we see as the best 3G network. Going forward, it’s our strategy to make sure we are supporting data growth in the tariffs we offer, the handsets and our network.’
When asked if this meant that Virgin would join Vodafone, Everything Everywhere, O2 and Three in bidding for 4G spectrum, he said: ‘We see ourselves as one of the biggest players in the data space. We continually review the various ways we ensure we keep a firm grip on our data requirements. We are looking at the data spectrum as a critical part of that evolution.’
The 4G auction is due to take place later this year with spectrum in the 800MHz, 1800MHz and 2.6GHz bands available.
Ovum analyst Matthew Howett said: ‘For a new credible nationwide operator to emerge they would have to secure a considerable amount of spectrum in the auction and most likely have to rely on another network operator to fill in the gaps where they would lack coverage.
‘What’s much more likely is that we see new entrants acquire some of the spectrum in the 2.6GHz band to be used on a sub-national basis, i.e in some cities and business areas. This spectrum is particularly good for capacity so would suit someone interested in providing data intense services.’
• Interview: Jamie Heywood on Virgin’s 2011 performance and plans for 2012