Operators cash-in on 4G spectrum

Operators cash-in on 4G spectrum

The UK's four operators have secured spectrum under Ofcom's 4G auction, with Vodafone the heaviest spender, splashing out £790m.

The government's coffers will be swelled by the £2.3bn earned by the auction, although the amount raised is lower than the £3.5bn price tag it slapped on 4G and considerably lower than the £22bn raised in the 3G auction. As Mobile revealed in December, operators predicted the government was too optimistic about the outcome of the auction.

Two types of spectrum were available; the more lucrative 800MHz spectrum, which provides greater penetration and 2.6GHz, which offers greater capacity. Participants went through more than 50 rounds of bidding. Vodafone secured the most spectrum, buying 2x10MHz of 800MHz, 2x20MHz of 2.6GHz and an unpaired 25MHz of 2.6GHz, paying £790.8m. O2, which also lacked 4G spectrum, only bought 2x10MHz of 800Mhz, spending £550m. It has a coverage obligation to provide indoor reception to 98% of the UK's population by the end of 2017.

Despite having a 4G service already, EE spent heavily, snapping up 2x5Mhz at 800Mhz and buying 2x35MHz of 2.6GHz. It spend £588.9m. Three has already bought spectrum from EE, which it will get by September, but it also spent £225m in buying 2x5MHz of 800MHz. The fifth winner was a subsidiary of BT, which bought spectrum at the 2.6GHz level. MLL Telecom and HKT were unsuccessful.

The race is now on for operators to bring their 4G offers to market to compete against EE, which has been pushing its 4G service since October. O2, Vodafone and Three are expected to launch their services by late spring. The winning participants first need to pay for the spectrum they have won by Friday.

Ed Richards, Ofcom CEO, 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.

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

'We also want consumers to be well informed about 4G, so we will be conducting research at the end of this year to show who is deploying services, in which areas and at what speeds. This will help consumers and businesses to choose their most suitable provider.'

Comment: Operators happy as Osborne's 4G gamble doesn't pay off

Author: Graeme Neill

Written by Mobile Today
Mobile Today

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