UK 4G auction falls short
The UK’s 4G auction netted £1 billion (€1.1 billion) less than predicted, with five successful bidders agreeing to pay a total of £2.34 billion for the spectrum.
Everything Everywhere, Hutchison 3G UK, BT subsidiary Niche Spectrum Ventures, Telefonica UK, and Vodafone all won spectrum during the auction, which began early January and ran to 50 bidding rounds. Despite the lower-than-expected price, regulator Ofcom claims the sale was successful in ensuring competition in the UK’s 4G market.
“This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country. We are confident that the UK will be among the most competitive markets in the world for 4G services,” chief executive Ed Richards says.
Matthew Howett, telecoms regulation analyst at Ovum, says operators will be relieved by the cost of 4G licenses, noting that the £22.5 billion they had to pay for 3G licenses a decade ago led to poor 3G coverage because operators “had very little to actually spend on building the network.”
Three should become a strong player in the UK, Howett argues, noting the carrier has won “valuable 800-MHz spectrum” that it can add to a block of 1800-MHz spectrum it acquired from EE before the auction started.
While carriers are now clear to begin planning their 4G launches, Howett points out they will have to work hard to convince consumers to upgrade. “A lack of detail from EE on how many customers they have tempted over to 4G has led some to believe that consumers just aren’t willing to pay more for faster speeds.”