4G Spectrum Auction Kicks Off

News Article - Thursday, 24 January 2013 11:32

By: Kerry Butters Category: Connectivity

The 4G spectrum auction has begun accepting bids from seven interested networks competing to acquire the new airwaves necessary to provide the new, superfast mobile broadband technology.

Ofcom has announced that bidders include: EE Ltd, HKT (UK), 3G UK, MLL Telecom Ltd, Niche Spectrum Ventures Ltd (subsidiary of BT), Telefonica UK Ltd and Vodafone Ltd. It’s thought that the new spectrum will allow almost double the space which is currently available for mobile broadband, which can be used for smartphones, tablets and laptops.

Ed Richards, Ofcom Chief Executive, said: "Today’s 4G auction is a very significant milestone for the UK’s communications sector.

"It will release the essential raw material for the next wave of mobile digital services. This will change the way we consume digital media in both our personal and working lives and deliver significant benefits to millions of consumers and businesses across the country.”

The bidding takes place over several rounds, with bids being placed over a secure connection using software which has been specifically written for the auction. In order to develop and maintain "healthy competition”, the telecoms regulator designed the auction to ensure that a minimum of four separate network operators will have "sufficient spectrum to be credible national 4G wholesalers”.

According to Ofcom, the UK is already the "most competitive mobile phone market in Europe” and it’s hoped that providing a competitive marketplace will maintain that, as it means better services can be offered to consumers at lower prices.

Yesterday, EE announced a cut in prices to its existing 4G services, which the company were allowed to launch ahead of the auction as it used an existing spectrum belonging to EE. The network cut prices by around 15% and upped the data download limits.

It’s thought that it will be a number of weeks before the results of the auction are known and during this time, no updates on the outcome will be released. This is necessary to avoid any potential risk of "strategic bidding”.

Following the auction, fees will have to be paid by the winners before they are granted a license and begin roll-out of 4G. It’s thought that networks will launch the new services in late spring and summer this year.

The "combination clock” auction format has been used previously by Ofcom and is designed to put the "spectrum in the hands of those who value it most highly”. This, Ofcom say, ensures that bidders also pay a competitive price for the technology.

The reserve price for the spectrum has been set at £1.36bn and is divided into lots.

Recent Articles