UK's 4G Auction Set for 2013

British regulator Ofcom has officially announced plans to auction 250MHz of spectrum in the 800MHz and 2.6GHz bands in an effort to kickstart the U.K.'s lagging 4G services market. (See Ofcom Unveils 4G Auction Plans.)

However, while the process will begin this year, the actual bidding will not happen until 2013, pushing back the arrival of LTE services in the U.K. well into next year at the earliest.

Ofcom has launched a consultation period on the auction rules (published today in a legal document) that will end on Sept. 11. Participants will then be able to apply to participate and be assessed by Ofcom as to their suitability.

After that the bidding process can begin, but this will likely not happen until "early 2013," states the regulator, which expects operators to launch LTE services to consumers late next year and ultimately offer 4G mobile broadband services to at least 98 percent of the U.K.'s 63 million inhabitants.

To put that timetable into perspective, South Korea has already achieved a 17 percent penetration rate for its 4G services, Sweden's Telia Company launched LTE services in 2009 and 4G services have been available in Germany in rural and urban markets for more than a year. (See South Korea: 4G Nation, Deutsche Telekom Takes LTE to the City and TeliaSonera First to Go Live With LTE.)

The process, which will see chunks of spectrum auctioned in lots, will give the U.K.'s operators a hefty new chunk of capacity: Currently they use 333MHz between them. It should also deliver a hefty chunk of cash to the U.K. government, which managed to squeeze more than £22 billion (US$34.1 billion) from five operators in the 3G auction held in 2000.

Here are the main points of Ofcom's plan:

  • The U.K.'s smallest current operator, Three UK , will not be squeezed out of the 4G market by its bigger rivals EE , Telefónica UK Ltd. (O2) and Vodafone UK , as Ofcom is reserving an unspecified minimum amount of spectrum for "either Hutchinson 3G or a new entrant altogether."

  • One of the 800MHz lots will come with an obligation to provide indoor 4G reception for 98 percent of the U.K. population by the end of 2017. The regulator hopes this will encourage the other 800MHz winners to follow suit. That stipulation sounds like good news for small-cell infrastructure suppliers.

  • A chunk of spectrum in the 1800MHz band may also be up for auction if Everything Everywhere concludes the sale of rights to the spectrum in time. Ofcom will make a decision on this later in the year.

  • A separate decision about whether Everything Everywhere can offer LTE services over the 1800MHz it is retaining has still not been made. Ofcom says a final decision on the operator's application will be made "in due course." (See Ofcom Considers UK LTE Short Cut.)

    — Ray Le Maistre, International Managing Editor, Light Reading

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