Ofcom already under fire on 4G

Litigation is in the air in the UK after regulator Ofcom published details of how the country will sell off 4G spectrum.
 
The regulator promises to sell off 250-MHz of spectrum in the 800-MHz and 2.6-GHz bands, with initial applications due by end-2012 set to pave the way for a full-blown auction early 2013. Ofcom is leaving spectrum available to a fourth national wholesaler, and will require that one of the 800-MHz lots be used to offer mobile broadband to 98% of the population within four years.
 
Ed Richards, Ofcom chief executive, says the auction terms are designed to “deliver the maximum possible benefit to consumers and citizens,” in most homes around the UK. Ofcom predicts carriers will be awarded licenses by mid-2013, and begin consumer services by the year end.
 
However, that decision leaves the UK lagging behind other global markets in terms of 4G deployment, argues Thomas Wehmeier, principal analyst with Informa Telecoms & Media. He estimates 4G commercialization in the UK will be around four years behind other leading nations – the “equivalent of light years in the fast paced mobile market.”
 
Wehmeier notes 4G penetration in South Korea already stands at 17%, and predicts the figure will hit around 50% “by the time the UK takes its first baby steps forward in 2013.”
 
Perhaps as a result of that perceived delay, Ofcom is already braced for legal retribution. Richards told the Guardian newspaper the regulator expects litigation by mobile carriers, however the same report reveals the UK’s three leading cellcos have welcomed the regulator’s decision, even if one operator likened the process of reading through the auction terms to playing “four dimensional chess.”
 
The Guardian also speculates the UK’s 4G auction will raise less than the previous sale of 3G spectrum in the market, which added £22.5 billion (€28.7 billion) to the country’s coffers. This time round, the figure is likely to be closer to £4 billion, the Telegraph states. The newspaper’s report also suggests Richards’ talk of litigation is something of a shot across the bows of mobile operators, pointing out that any challenge will further delay the 4G auction process.

 

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