Ofcom unveils 4G spectrum winners

20 Feb 2013

UK telecoms regulator Ofcom has revealed the names of those companies that successfully bid in the country’s auction of fourth-generation spectrum. Following more than 50 rounds of bidding, five bidders have emerged with new frequencies, with all four of the country’s existing mobile network operators laying claim to spectrum. Ofcom auctioned off a total of 250MHz of spectrum across two different bands – 800MHz and 2.6GHz – and it emerged that Vodafone will pay the most for its new frequencies, having bid GBP790.761 million (USD1.22 billion) for 2×10MHz in the 800MHz band, in addition to 2×20MHz of 2.6GHz and 1×25MHz of 2.6GHz (unpaired). EE, the country’s largest cellco by subscribers, will spend GBP588.876 million on 2×5MHz in the 800MHz band, as well as 2×35MHz in the 2.6GHz band, while the market’s smallest operator, Hutchison 3G UK (which operates under the ‘Three’ banner) will be allocated 2×5MHz of 800MHz spectrum in return for GBP225.000 million. Rounding out the existing players, O2 UK successfully bid GBP550.000 million for 2×10MHz of 800MHz spectrum; uniquely, Ofcom has confirmed that it has attached a coverage obligation to these frequencies, with O2 UK required to provide a mobile broadband service for indoor reception to at least 98% of the UK population (expected to cover at least 99% when outdoors) and at least 95% of the population of each of the UK nations – England, Northern Ireland, Scotland and Wales – by the end of 2017 at the latest. The final winning bidder is Niche Spectrum Ventures. The BT subsidiary will pay GBP186.476 million for 2×15MHz of 2.6GHz and 1×20MHz of 2.6GHz (unpaired) spectrum.

Despite the main part of the auction having now been concluded, Ofcom has noted that one final step remains in completing the sale process to determine where in the 800MHz and 2.6GHz bands each winning bidder’s new frequencies will be located. Bidding in this ‘assignment stage’ is expected to take place ‘shortly’, the regulator said. Subsequently, once licence fees have been paid, the concessions will formally be awarded, with a view to allowing winners to use the spectrum to launch commercial services by summer 2013.

Commenting on the completion of the spectrum sale, Ofcom CEO Ed Richards noted: ‘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 … We also want consumers to be well informed about 4G, so we will be conducting research at the end of this year to show who is deploying services, in which areas and at what speeds. This will help consumers and businesses to choose their most suitable provider.’