Five of the UK’s biggest telecoms firms have managed to snare a slice of the 4G spectrum, the communication regulator, Ofcom, announced today. BT, EE (EverythingEverywhere), O2, Three UK and Vodafone all gained access to 800MHz and 2.6GHz radio spectrum, though a final allocation process still needs to determine exactly which place each company will take in that spectrum range.
Two lesser known bidders failed to grab a share, however.
HKT, a subsidiary of Hong Kong telecoms giant PCCW, operates in the UK as Now Broadband and already offers 4G home broadband services for businesses and consumers. With extra capacity, the company could have gained another foothold in those competitive markets or continued to develop the other side of its business: small networks for communities without other internet access.
MLL Telecom, a UK company which specialises in backhaul links and wide area networks, would have used the extra capacity to move further into small cell provision, helping mobile operators to effectively plug the coverage gaps on overcrowded networks caused by ever increasing demand for mobile data.Supporting fibre
BT, bidding as Niche Spectrum Ventures, were an interesting late addition to the 4G auction and also plan to use their share of the spectrum to plug some gaps. The UK’s former incumbent telecoms provider hasn’t actually owned a mobile network since the sale of BT Cellnet many years ago and the company denies that their slice of the 4G auction is designed to get them back in the game.
Instead, BT say, they'll use 4G to support users of their existing fixed line infrastructure and build on their "existing strength" in Wi-Fi.
Virgin Media, the UK’s other big provider of fibre, are also likely to use 4G to support their existing services. Although the company didn’t bid in the auction they do already use EE’s network to provide mobile services as a complement to their increasingly popular 100Mb (see more here
) fixed line services. Treasury lose out
Bidders paid just over two billion pounds – or £2,341,113,000, to be precise – in an closed auction process that saw around 50 bids in all.
That amount, just 10% of the amount the 3G auction raised in 2000, has been widely interpreted as a blow to the Treasury: in his Autumn Statement the chancellor, George Osbourne, predicted that it would raise £3.5 billion.
Take that angle with a pinch of salt, however. It’s no secret that Osbourne’s figure was fairly optimistic.
Ofcom’s reserve price, announced in November, was £1.3 billion and the regulator has consistently declined to guess how much the process would raise and, when pressed, Ofcom’s chief executive Ed Richards noted that he hadn’t heard the £3.5 billion figure before Osbourne bought it up.
"However many billions the actual revenue is, the real economic benefit here is in the benefit to consumers and the economy
If we were to calculate the estimated economic benefit of that, it would massively dwarf the revenues from the auction, so that is the game for us," Richards said.