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Vodafone, EE, and Three win big at 4G auction but Ofcom comes up £1bn short

TelecomsNews
by James Laird
, 20 Feb 2013News
Vodafone, EE, and Three win big at 4G auction but Ofcom comes up £1bn short

UK telecoms regulator Ofcom has raised £2.34 billion through its 4G auction, with Vodafone leading the bidding and nabbing five slices of high-speed spectrum at a total cost of £791 million.

A total of 250 MHz of spectrum was auctioned in two separate bands – 800 MHz and 2.6 GHz - with Vodafone's acquisition of two 10MHz chunks likely the most significant splurge.

Telefonica arm O2 will also be joining the commercial 4G market in the near future, while existing LTE provisioner EE succeeded in adding nearly £600 million of additional space to its high-speed mobile operations.

The other two winners as announced by Ofcom were Three and BT subsidiary Niche Ventures. The list of failed bids is headlined by Hong Kong-based telecoms firm PCCW.

Despite failing to meet its £3.5 billion target, Ofcom claimed that the wider roll out of 4G was a win-win situation for the UK.

"4G coverage will extend far beyond that of existing 3G services, covering 98 per cent of the UK population indoors - and even more when outdoors - which is good news for parts of the country currently underserved by mobile broadband", said Ofcom representative Ed Richards, according to the BBC.

However, the fact that the auction raised some £1 billion less than predicted has prompted an outbreak of political bickering, as the opposition Labour Party sought to portray the below-par result as symbolic of the government's failed economic policies.

"It's extremely worrying that the Chancellor's entire budgetary strategy seems to be based on numbers that were significantly over-estimated," said Chris Leslie, shadow chief secretary to the Treasury.

The Treasury  was quick to dismiss such suggestions.

"The £3.5 billion number at Autumn Statement 2012 was certified by the independent OBR and based on external expert independent analysis based on similar auctions, including the last 3G one. The final auction revenue will be accounted for at Budget in the usual way," a Treasury spokesperson stated in response to the concerns.

Ofcom did not comment on its failure to achieve the target figure, saying only that we live in "very, very different times" - presumably a reference to the £22.5 billion raised through 2000's 3G auction.

The regulator added that it would now begin working towards "the release of further spectrum for possible future '5G' mobile services."

For more on the UK's new high-speed mobile spectrum, why not check out Riyad Emeran's first impressions review of EE's 4G network.

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