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Wednesday, February 20, 2013

Major UK networks all win 4G spectrum in Ofcom auction

BT is fifth 4G UK winner

Telecoms regulator Ofcom has announced the winners of the UK’s 4G mobile spectrum auction, which has finally been completed after more than 50 rounds of bidding. It means that faster mobile broadband services will soon be offered to more people by more companies.

The UK’s major mobile networks - Everything Everywhere Ltd (EE), Hutchison 3G UK Ltd (Three UK), Telefónica UK Ltd (O2) and Vodafone Ltd - have all won radio spectrum. In addition, spectrum has been awarded to a new company with a familiar backer: Niche Spectrum Ventures Ltd, a subsidiary of the BT Group.

MLL Telecom Ltd and HKT (UK) Company Ltd, which also entered the auction, were not successful.

These five companies have been awarded a total 250MHz of spectrum across two separate bands: 800MHz and 2.6GHz. The lower frequency band offers better coverage; one of the 800MHz auction lots included an obligation for the winner to provide indoor reception to at least 98% of the UK population by the end of 2017.

Once the companies have all paid, a final stage in the auction process will determine exactly where in the 800MHz and 2.6GHz bands each bidder’s new spectrum will be located. Commercial services are then expected to launch from late spring or early summer.

Ed Richards, Ofcom’s 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. 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.”

Winning bidder 4G spectrum won Price
Everything Everywhere

2 x 5 MHz of 800MHz &

2 x 35 MHz of 2.6GHz

£588,876,000
Hutchison 3G 2 x 5 MHz of 800MHz £225,000,000
Niche Spectrum Ventures

2 x 15 MHz of 2.6GHz &

1 x 20 MHz of 2.6GHz (unpaired)

£186,476,000
Telefonica UK

2 x 10 MHz of 800MHz

(with coverage obligation)

£550,000,000
Vodafone

2 x 10 MHz of 800MHz,

2 x 20 MHz of 2.6GHz &

1 x 25 MHz of 2.6GHz (unpaired)

£790,761,000

The auction generated £2.341 billion, which must be paid by the end of tomorrow. Previous government statements had expected £3.5 billion to be made from the sale.

[Ofcom announcement]

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Author: The Fonecast
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2 comments on article "Major UK networks all win 4G spectrum in Ofcom auction"

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James Rosewell

2/20/2013 12:35 PM

Finally the UK can start to catch up with the rest of the world. Also total cash generated shows bidders have learnt how to the play the auction game rather than the spectrum is less valuable.


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Mark

2/20/2013 7:55 PM

Auction reserve £1.3 billion, amount paid £2.4 billion, OBR estimate £3.5 billion. We appear to have learned that the UK's mobile networks are smarter than the Office for Budget Responsibility gave them credit for - but perhaps not as smart as Ofcom expected.

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