Ofcom’s 4G auction up and running

Ofcom’s 4G auction up and running

The auction of the remaining 4G spectrum made available for network operators in the UK has begun, with seven bidders all set to compete against one another to acquire the new airwaves.

Vodafone Limited, HKT (UK) Company Limited (a subsidiary of PCCW Limited), Hutchison 3G UK Limited, MLL Telecom Ltd, Niche Spectrum Ventures Limited (a subsidiary of BT Group plc), Telefónica UK Limited and Everything Everywhere are all set to take part.

The new spectrum available in the Ofcom auction will double the airwaves currently available for mobile broadband, which will boost the services for smartphone, tablet and laptop users in the UK.

Ed Richards, Ofcom chief executive, said the 4G auction is a "very significant milestone" for the UK in terms of its communication capabilities.

"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."

Bidders are competing for 28 different lots of spectrum in two separate bands, with 800 MHz and 2.6 GHz available to the seven firms.

The lower 800 MHz frequency is part of the digital dividend that was freed up when the UK turned off its terrestrial TV signal and is ideal for widespread mobile coverage. The 2.6 GHz frequency is ideal to deliver the capacity needed for faster speeds, and when combined, the spectrums create the potential for 4G mobile broadband services to be widely available across the UK.

Each of the bids are being placed online via secure connections, through software that has been specifically designed with the 4G auction in mind. There is set to be several rounds of bidding and they could take a number of weeks to be completely resolved.

Once the fees are paid by the winning bidders, licences will be granted, enabling operators to start rolling out new networks, which could be up-and-running as soon as late spring/ summer 2013, great news for businesses that are allowing staff to work through mobile devices on the move.

With the UK being one of the most competitive mobile phone markets in the Europe there is expected to be fierce rivalry between each of the bidders. In order to maintain competition, Ofcom has designed the auction to ensure that at least four different operators have sufficient spectrum to be credible national 4G wholesalers.

Once all of the bidding process and the granting of licences takes place the final stage of the auction will take place, the assignment stage. Winning bidders can bid for the precise frequencies of spectrum that they wish to be assigned and Ofcom will determine on the basis of the bids who is assigned which frequencies.

This process will decide whether a bidder wins spectrum at the top or bottom, or somewhere in the middle, of the 2.6 GHz band, a fact which could be crucial when it comes to launching the services in the UK.

Everything Everywhere has been running its 4G service for a number of months, but has struggled to attract early adopters to its network and recently created a new pricing strategy to generate interest ahead of the launch of rival broadband services from the likes of Vodafone and O2.