The government has trousered a disappointing £2.3 billion in the 4G mobile broadband spectrum auction, but who’s got what and what will they do?
Two groups of radio frequencies were auctioned to mobile broadband providers, who are expected to launch services from May this year, although it will take until late 2017 for full UK coverage to be achieved.
The 800MHz former Freeview spectrum will be useful for rural long range reception and reaching into buildings; and high speed 2.6GHz spectrum suits busy urban areas.
The most expensive winner was Vodafone, paying £790m for swathes of 800Mhz and 2.6GHz spectrum, but the most important could be O2, which is obliged to provide 98 per cent indoor coverage across the UK.
Read more about 4G and the UK auctionEd Richards, Ofcom’s chief executive, said: “4G coverage will extend far beyond that of existing 3G services, which is good news for parts of the country currently underserved by mobile broadband.
“We also want consumers to be well informed about 4G, so we will be conducting research at the end of this year to show who is deploying services, in which areas and at what speeds. This will help consumers and businesses to choose their most suitable provider.”
Two bidders didn’t win anything: MLL Telecom Ltd and HKT (UK) Company Ltd, but it was unlikely they would have launched public-facing services.
Ofcom’s next task will be to assign the exact frequencies the mobile operators will use, and set up a system to monitor speeds and coverage for a consumer guide to be published in early 2014.
Most of the frequencies were sold in twinned lots – one each for upstream and downstream traffic – although a few are ‘unpaired’ for the networks to use as they need.
The winning 800MHz networks will also face the bill for making sure their signals don’t interfere with neighbouring Freeview transmissions, and fixing the problem if they do – the 4G Freeview Fail.
- Three: Small player, low prices?
- O2: Superfast everywhere
- Vodafone: big spender, big winner
- EE: A bit of everything, all over the place
- BT: Boosting WiFi
It was Britain’s first 3G network, and now Three will be able to launch a 4G service in the valuable 800MHz spectrum that should complement its existing high speed capacity at 2.1GHz and mid-range frequencies at 1800MHz.
The auction was designed to guarantee four winners, so Three was almost a shoe-in for the two 5MHz slices it’s won, at a low cost of £225 million.
Three has already promised to make 4G part of existing contracts, along with its existing Ultrafast DC-HSDPA network, which promises to make for competitive pricing.
Three UK’s chief executive, Dave Dyson, said: “We don’t want to limit Ultrafast services to a select few based on a premium price and we’ve decided our customers will get this service as standard.”
It may be an obligation, but O2 is likely to shout loudly that it will have to cover 98 per cent of the UK population indoors with its 4G network by the end of 2017.
The signal will also have to reach 99 per cent of us outdoors, and that must be evenly spread to at least 95 per cent each of England, Northern Ireland, Scotland and Wales.
This will be done using two lots of 10MHz in the 800MHz range, which cost a cool £550m, but was there a discount for the coverage obligation?
Whatever happened, it will be combined with existing 2G and 3G holdings in 900MHz and 1800MHz – it’s likely Ofcom will relax restrictions so some of these can be used for 4G as well.
O2 boss Ronan Dunne said: “While 4G will indeed allow for faster data speeds and a more seamless mobile experience, it is our intention to go beyond what has already been offered in the market and give our customers a unique and exclusive range of digital experiences, marking a new generation for the mobile industry.
“This is a truly landmark moment for the UK, presenting a wealth of opportunity to transform mainstream services to improve people’s lives.
“Now the investment has been made for 4G to become a nationwide reality, we want all organisations across all sectors to ensure the true value of 4G is realised, so that together we can make Britain truly digital.”
A healthy £791m bought Vodafone two 10MHz slices of the 800MHz band, while at 2.6MHz it won two 20MHz lots and a further 25MHz of unpaired frequencies.
Vodafone hasn’t detailed its 4G plans, but this will give it a high capacity presence, particularly in urban areas where the extra 25MHz will boost download capacity for streaming media.
Vodafone UK chief executive Guy Laurence said: “We’ve secured the low frequency mobile phone spectrum that will support the launch of our ultra-fast 4G service later this year.
“It will enable us to deliver services where people really want it, especially indoors. This is great news for our customers. The next generation of mobile internet services will bring real benefits to both consumers and businesses.”
EE pioneered 4G in the UK late last year, and already reaches almost half the UK population, and claims to have converted hundreds of thousands of its Orange and T-Mobile 3G users to the new service.
The 4G EE network already reaches half the UK population via 1800MHz frequencies. Spending £589m to win two 5MHz lots at 800MHz and a pair of hefty 35MHz slices at 2.6MHz it can tactically boost long-distance and indoor coverage, while adding hefty superfast capacity in urban centres.
Olaf Swantee, CEO of EE, said: “EE is extremely pleased with the outcome of the spectrum auction. Coupled with our existing 1800MHz 4G network, it consolidates our position as the most advanced, largest and most capable 4G operator in the UK.
“The acquisition of low and high frequency spectrum allows us to boost our superfast data services and coverage – indoors and outdoors, in cities and the countryside.
“This result means that we are perfectly placed to meet future data capacity demands – further enhancing the superfast 4G services we already offer the UK’s consumers and businesses.
“We look forward to continuing the rollout of the nation’s fastest mobile internet services.”
Don’t expect a new mobile broadband service from BT – this is a cunning move to enhance the BT WiFi service included with its broadband packages.
BT spun up a new subsidiary called Niche Spectrum Ventures to win high capacity spectrum at 2.6GHz, specifically a pair of 15MHz channels and 20MHz of unpaired frequencies.
This £186m strategic purchase will be a boon to BT’s customers with tablets, phones and dongles, who will no doubt find cells in transport hubs, venues and major cities.
BT chief executive Ian Livingston said: We do not intend to build a national mobile network. Instead, this spectrum will complement our existing strategy of delivering a range of services using fixed and wireless broadband.
“We want our customers to enjoy the best possible connections wherever they are and this spectrum, together with our investment in fibre broadband, will help us achieve that.”