Three and Vodafone dubbed winners of 4G auction

Three and Vodafone dubbed winners of 4G auction

Three and Vodafone have been seen as the big winners of the 4G auction, with consumers set to benefit from the lower than hoped pricetag.

Each of the UK's four operators came out of the auction with fresh 4G spectrum. With almost £800 million invested, Vodafone was the heaviest spender. Kester Mann, senior analyst for operators at CCS, said its expenditure was 'a statement of intent' to regain market share. Dario Talmesio, principal analyst at Informa, said: 'Vodafone is in a good position to catch up quickly as it will be able to combine the huge amount of spectrum it secured in the auction with the recently acquired Cable and Wireless assets.'

Three has now almost doubled its spectrum holding during the past year and was also seen as a winner. Talmesio added: The balance of power is shifting, with [Three] being able to offer much better coverage compared with what it is able to offer now. This will make it a stronger competitor and make the race to the premium customer even more interesting.'

Questions were raised about O2's surprisingly low acquisition, with it snapping up low frequency spectrum. CCS's Mann said: 'O2 failed to secure frequencies at 2.6GHz, which may mean it struggles to meet growing data needs from its customers. This may have been partly due to BT's strong presence in the auction. O2 has acquired the licence that mandates a minimum coverage requirement which could lead to a more expensive network deployment in the long term.'

Matthew Howett, telecoms regulation analyst at Ovum, said the lower than hoped pricetag of the spectrum is a good thing for operators. He said: 'For them, the fact they didn't have to pay billions more is without doubt a positive thing. The costs of rolling out a network are significant. It could be argued that the relatively poor 3G coverage we have seen in the UK up until now is at least partially a result of operators being left out of pocket after the last auction that they had very little to actually spend on building the network.'

Brian Potterill, director at PwC's telecoms strategy team, said the auction's outcome could benefit the consumer. He said: 'Although some observers may be disappointed that the auction did not raise more for the Treasury, their loss is the consumers' gain as we can look forward to lower prices and widespread coverage.'

Author: Graeme Neill

Written by Mobile Today
Mobile Today

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