Mobile operators snap up bargain 4G bandwidth

By Rachel Hand topicIcon Mobile Marketing

Bidding for bandwidth

The results of an auction for 4G bandwidth have been announced today by government telecoms body Ofcom.

The top five bidders in Ofcom's auction will receive permits to use a portion of UK airwaves to provide 4G connectivity. After over 50 rounds of bidding, the main winners include Vodafone, paying £791m, Everything Everywhere, paying £589m for increased capacity, and Telefonica UK (trading as O2) paying £550m. Meanwhile Hutchison 3G (Three) and Niche Spectrum Ventures (a BT subsidiary) also secured smaller proportions of 4G bandwidth with lower bids.

In an Ofcom statement, Chief Executive Ed Richards commented:

"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."

Mobile browsing arms race

4G will bring speeds comparable to current desktop browsing to smartphones and tablets, heralding a predicted shift in device usage. It is therefore at the centre of the race between mobile networks to provide faster connectivity.

Everything Everywhere was the first operator to introduce 4G to the UK in 2012. The winners of the auction will be rolling out their 4G services in spring or early summer 2013, while Ofcom believes "almost the whole UK population will receive 4G mobile services by the end of 2017 at the latest". Smaller mobile operators who did not submit a bid for bandwidth, as well as unsuccessful low bidders MLL Telecom and HKT UK, could therefore be missing out.

Meanwhile, the auction was maybe not as successful as Ofcom might have hoped, raising a total of £2.34bn for the Treasury; falling far short of the predicted £3.5bn. It's a far cry from the 3G bandwidth auction back in 2000, which netted the government £22.5bn.

Tom Glass, creative director at theEword, said: "Although Ofcom claims its auction was intended to encourage competition, it's unfortunate that operators who couldn't stump up the money are out of the race before it even started. Of course, faster mobile broadband is really exciting, not least the way it will inevitably impact on business and marketing, so we could see further benefits to the economy in future."