UK operators offered €3.5B by European Investment Bank for LTE spectrum bids

UK operators looking to bid for LTE spectrum could have access to €3.5 billion of low-interest funding from the European Investment Bank (EIB). All four major UK operators are expected to enter the spectrum auction, which will start Dec. 11.

This move follows quickly on the heels of the EIB announcing a loan to EE, the UK's largest operator, of £350 million to upgrade its antenna network across the UK to improve LTE coverage.

Unnamed sources at the EIB told the Daily Telegraph the bank was interested in backing would-be buyers of the UK's LTE spectrum, and the loan made to EE did not mean a "first come first serve" arrangement for any future financing.

This year, the UK has pledged an extra £1.6 billion to the EIB, which is tasked with backing infrastructure and development projects across Europe.

The UK government, which is attempting to raise funds to service its debt mountain, said in a budget statement it is looking to raise around £3.5 billion from the spectrum auction. The auction of 3G spectrum saw the UK government pocket £22.5 billion when the bidding took place at the height of the Internet boom 12 years ago.

Prior to the possible involvement of the EIB, analysts had long-predicted that the LTE auction will not raise anything close to the 3G process. "Despite 80 per cent more spectrum being available in this auction than during the 3G licensing of 2000, it's likely to generate a mere fraction of that amount," Ovum analyst Mathew Howett told the Daily Telegraph.

Bidders will need to lodge an application with UK telecom regulator Ofcom and make a £100,000 cash deposit by Dec. 11 to compete in the auction. Bidding will start in January and licences will be granted in February and March. Telecoms regulator Ofcom that reserve prices for the spectrum would be a combined total of £1.3 billion.

Separately, EE said its LTE subscribers are experiencing average download speeds of between 6 and 8 Mbps, and can see 30 Mbps in some circumstances.

Speaking at an eForum event in London, Mark Overton, EE's vice president of wholesale and M2M, said: "We've been live in the market for just over a month now and are seeing reliable 6 to 8 Mbps, and I think anyone using 3G would agree that's faster. And we are seeing significant customer uplift on speed on that data access."

According to V3, Overton said EE is looking at bidding for 800 MHz spectrum ahead of the forthcoming auctions in January, but said its 1800 MHz service was working well.

"The reality is 1800 MHz does a huge amount but we are interested in 800 MHz," he said. "We're interested in any spectrum really as it's such a precious commodity so we want as much as we can get to offer a seamless experience."

For more:
- see this Daily Telegraph article
- see this separate Daily Telegraph article
- see this Reuters article
- see this V3 article

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