Ofcom announces 4G spectrum auction to take place Q1 2013
The long awaited 4G mobile auctions are to get under way at the end of 2012 to ensure that Ofcom meets requirements of the EU commission. After legal battles, several consultations and dates which have drifted back, the processes which will allow the next generation of mobile broadband services to be used in the UK will get under way at the end of this year with the actual auction taking place in the first quarter of 2013, and services possibly available from mid-2013.
The timeline is constrained by the European Commission who set a deadline requiring that the authorisation process to allow the use of the 800MHz and 2.6GHz spectrum bands should be underway by the 1st of January 2013. This is of course good news for consumers who will finally see next generation mobile services able to offer faster broadband speeds, which have been available in other countries for several years. The main use of the 4G bands will be a technology called Long Term Evolution (LTE) which allows speeds to approach 100Mbps, although real world speeds seen by consumers will be much lower than this. They should be more than suitable for watching video streams however. Another advantage of the technology, is that the lower frequency band of 800MHz which is used will allow the signal to travel further - increasing the range of potential services.
Under the auction, Ofcom has worked in some specific obligations which one operator with spectrum in the 800MHz band will have to meet. This will require them to provide a 98% UK population coverage which will enable speeds of 2Mbps indoors. This indoor requirement should mean that outdoors coverage reaches 99.5% of the population. Note, that this doesn't mean that nearly the entire country will be swathed in mobile signal, but only those areas that are populated. It's worth remembering that 98% coverage means that around 1.2 million people will not have access to this new technology. The coverage requirements also stated that coverage should be at least 95% to each nation, so countries such as Scotland and Wales with harsh rural conditions may find that these areas also slip off the coverage map.
Ofcom also hope to ensure that there remains healthy competition within the market by reserving spectrum for a fourth operator. Ofcom is uncertain whether Hutchison 3G (H3G), Three, will bid for their spectrum on their own and has therefore reserved some spectrum for a fourth wholesaler, whether this be H3G or another provider, to ensure that the market does not stagnate.
Three have a network sharing agreement (Mobile Broadband Network Limited, MBNL) with Everything Everywhere (the company formed from the merger of Orange and T-Mobile) which has enabled both companies to increase their 3G network coverage, and the companies may choose to integrate LTE through the same or a similar joint venture on joint spectrum. Some question marks may lie over a similar agreement between Vodafone and O2 but the companies might opt for separate spectrum which would provide advantages in the number of customers that can be served from a specific cell site. Ofcom seem less concerned that O2 and Vodafone will put in a joint bid.
It's uncertain what kind of revenue Ofcom will receive from this spectrum auction - the 3G auctions of 2000 netted nearly £22.5 billion - but with the current banking and financial issues plaguing much of the world, companies may be prudent in how much they are willing to spend. In anycase, the outcome will be a step up the technology ladder for the UK which will hopefully benefit everyone in their day to day lives.
"The 4G auction has been designed to deliver the maximum possible benefit to consumers and citizens across the UK.
As a direct result of the measures Ofcom is introducing, consumers will be able to surf the web, stream videos and download email attachments on their mobile device from almost every home in the UK.Ed Richards, (Chief Executive) Ofcom
The full statement on the awarding of spectrum is available from Ofcom.