4G auction in UK ‘only’ raises £2.34bn, less than expected

21 February 2013

The UK telecoms regulator, Ofcom, has raised £2.34bn from its auction of the 4G mobile spectrum for the government, less than the £3.5bn expected. The winning bidders for the superfast mobile internet and download data services licenses were Vodafone, Everything Everywhere; Hutchison 3G UK; Niche Spectrum Ventures, a BT subsidiary; and Telefonica (O2).

When mobile licenses were last auctioned off in the UK over a decade ago the government raised £22bn in 3G bandwidth sale revenue, but mobile firms were wary this time of over-paying as they did previously.

The new faster speeds and data downloads are expected to give a further boost to the already high adoption of smartphones and mobile services in the UK, with mobile commerce, payments, loyalty schemes and banking apps all expected to benefit from the increased capacity and speeds available to app developers and end users. According to Ofcom 4G will provide £20bn of benefits for UK consumers over the next 10 years.

UK culture secretary, Maria Miller, commented that: "Spectrum use is worth more than £50bn to the UK economy in total and 4G mobile broadband is a key part of our digital growth strategy, so I am delighted the auction has been completed."

The regulator auctioned the spectrum in two bands, 800MHz and 2.6GHz, equivalent to two-thirds of the radio frequencies currently used by wireless devices, such as tablet computers, smartphones and laptops. This should ensure that the 4G networks achieve widespread coverage across the UK and can cope with large urban demand.

EE was the first UK mobile network operator (MNO) to launch a 4G service back in September last year, but customer uptake has not been as high as hoped leading to discounting. Now the rest of the industry is able to offer 4G it will be interesting to see if it gains faster adoption.

Bobsguide will have a reporter at the Mobile World Congress (MWC) 2013 trade show next week and produce a full report on it, with follow-up interviews and articles to come. Please visit our blog section. For last year's show report please click here

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