4G mobile auction to deliver new mobile data services

4G mobile auction to deliver new mobile data services

Ofcom has announced today their proposed rules for the largest ever auction of radio spectrum, following on from the highly lucrative 3G spectrum auction in 2000 which raised over £22bn for the UK Government.

Whilst it’s unlikely this round of auctions will raise anything like such a large amount of revenue, it will enable faster mobile broadband speeds as well as a range of new services. Ofcom is in the process of consulting on the structure of the auction but there are a number of key points which will apply:

  • Auction designed to promote coverage  – by ensuring that one of the auction blocks has a 95% population coverage requirement
  • 2 spectrum bands – 800 Mhz and 2.6 GHz – 800 Mhz is being made available as part of the switch-off of analogue television and will provide widespread mobile coverage. 2.6GHz provides higher speed services.
  • Promote competition – Ofcom will limit the amount of spectrum available to each bidder so that competition will be promoted – Ofcom is keen to ensure there is a minimum of 4 networks providing services
  • Rural Coverage – There may be requirements to provide aq minimum level of coverage within a rural population

Don’t expect any services to be delivered rapidly – the proposed dates for the auction are early 2012 and the services are unlikely to be delivered until 2013. Customers will need to upgrade equipment to take advantage of these new services as they run on different frequencies.

 

Arrow’s View

With the increasing demands for mobile bandwidth this spectrum auction is vital to ensure the continued delivery of mobile data services and to allow the evolution of newer service offerings.  We expect all 4 existing mobile operators to bid for licences, however, the amount raised will be significantly less than the original 3G license auctions. The only question is, will the networks be able to keep enhancing the bandwidth offered over 3G until the 4G services are more widely available.