Report: Telefónica ready to spend €1.5B on UK LTE auction

Telefónica could invest around €1.5 billion to acquire LTE spectrum licences in the forthcoming UK auction, according to a report in the Spanish newspaper Cinco Dias.

The report, citing unnamed market sources, noted the importance of the UK to Telefónica. In the first half of 2012 the UK market represented 11 per cent of the company's revenue. The operator's O2 UK has already benefited from 3G network improvements that has seen infrastructure capital expenditures rise by nearly 10 per cent to €375 million over the past six months.

The Spanish-based operator acquired LTE spectrum in the German 2010 auction bidding a total of €1.379 million, and bid a further €842 million last year acquiring LTE spectrum in its domestic market.

In July the UK regulator Ofcom said it will auction LTE spectrum by the end of the year with the expectation that operators will launch commercial service in 2013.The auction will be for two bands, the 800MHz  and 2.6 GHz bands, though Ofcom has allowed O2 UK rival Everything Everywhere to launch LTE on its existing 1800 MHz spectrum.

Separately, Telefónica's fortunes have been boosted by a strong performance from China Unicom, in which the company holds a 5 per cent stake. The Chinese operator posted a net profit of €430 million in the first six months of the year, representing a 31 per cent improvement over the same period of 2011, according to El Economista.

For more:
- see this Cinco Dias article (translated via Google Translate)
- see this Dow Jones Newswires article
- see this El Economista article (translated via Google Translate)

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