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UK Kicks Off 4G Auction Process

Michelle Donegan
Wireless Bits
Michelle Donegan
12/11/2012
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2:35 PM -- After years of delay, the 4G spectrum auction process in the U.K. officially started today. Hurrah!

U.K. regulator Ofcom on Tuesday accepted applications from potential bidders, along with a £100,000 (US$161,000) entry fee. And the deadline to apply was 4:00 p.m. GMT. But we won't know who has applied to bid for spectrum until Ofcom reviews the applications and publishes the list of those who qualified by the end of this year or early next year. That is, unless I can find out first!

This is just the qualification phase for the auction, but it does mark the start of the long-waited event in the British telecom calendar. Bidding is expected to start in January 2013.

Up for grabs is a total of 250MHz of spectrum in the 800MHz and 2.6MHz frequency bands suitable, and even very desirable, for 4G services.

Now that the auction process is under way, U.K. operators 3 , Telefónica UK Ltd. (O2) and Vodafone UK -- assuming they all qualify to participate -- can start playing catch-up with rival EE . The U.K. joint venture of T-Mobile (UK) and Orange UK will enjoy a 4G head start of at least seven months because it won approval from the regulator to launch commercial LTE services on October 30 using the 1800MHz spectrum is already had for 2G services. (See Britain's Bloomin' LTE , EE Shares 4G Lessons Learned and How Not to Do 4G, EE-Style.)

Even once more 4G services are launched sometime in 2013, the U.K. will still lag far behind other LTE markets. Informa Telecoms & Media analyst Thomas Wehmeier put the U.K.'s position into some context in a research note issued today: "By the time the remaining 4G networks are switched on at some point in the middle of next year, more than one-third of Korean and about 20 percent of Japanese consumers will already be actively using 4G services in their respective countries." (See Europe Set for LTE Laggard Status.)

But the big question about this auction is who wants the 4G spectrum most? Ofcom has designed the auction to ensure that there are four wholesale mobile network operators providing 4G services. One scenario, and a likely one, is that the existing four operators -- 3, EE, O2 and Vodafone -- emerge from the auction with new 4G spectrum. But the process is certainly open to a newcomer.

So, will it be the status quo or could there be a fresh player on the U.K.'s 4G scene to shake things up a bit? A new mobile operator in the country would be exciting, for sure, but I don't think it's very likely.

— Michelle Donegan, European Editor, Light Reading Mobile

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