Ofcom announce winners of UK 4G spectrum auction

Ofcom announce winners of UK 4G spectrum auction

Ofcom today announced the winners of its 4G spectrum auction, with Everything Everywhere; Hutchison 3G UK; Niche Spectrum Ventures, a BT subsidiary; Telefónica (O2); and Vodafone, emerging as winning bidders.

In 50 rounds of bidding, a total of 250MHz of spectrum was auctioned in the 800MHz and 2.6GHz bands. It is thought that the combination of the two bands will allow networks to deal with concentrated demand in urban areas as well as provide widespread network coverage.

A coverage obligation attached to one of the 800MHz lots of spectrum, won by Telefónica UK Ltd, meaning the operator is obliged to provide a mobile broadband service for indoor reception to at least 98% of the UK population (expected to cover at least 99% when outdoors), by the end of 2017.

The auction rose less than expected for the Treasury, bringing in just £2.34bn of the £3.5bn forecasted by the Office for Budget Responsibility (OBR) in December 2012. Despite this, Ofcom said it has achieved its purpose of ensuring competition within the industry, and are confident that the UK will be among the most competitive markets in the world for 4G services.

Ed Richards, Ofcom Chief Executive, described the auction as “a positive outcome for competition in the UK, which will lead to faster more widespread mobile broadband, and substantial benefits for consumers and businesses across the country”.

Ofcom estimate that by securing at least four credible national wholesalers of 4G mobile services, the auction will result in £20bn worth of benefits for UK consumers over the next 10 years.

A final ‘assignment stage’ now remains in order to determine where each winning bidder’s new spectrum will be located. Once this final stage is complete, and bidders have paid their full licence fees, Ofcom will grant winners with their licences. Resulting 4G services are expected to be rolled out to consumers from spring or early summer 2013.

Results:

Winning bidder Spectrum won Base price
Everything Everywhere Ltd 2 x 5 MHz of 800 MHz and 2 x 35 MHz of 2.6 GHz £588,876,000
Hutchison 3G UK Ltd 2 x 5 MHz of 800 MHz £225,000,000
Niche Spectrum Ventures Ltd (a subsidiary of   BT Group plc) 2 x 15 MHz of 2.6 GHz and 1 x 20 MHz of 2.6 GHz (unpaired) £186,476,000
Telefónica UK Ltd 2 x 10 MHz of 800 MHz (Coverage obligation lot) £550,000,000
Vodafone Ltd 2 x 10 MHz of 800 MHz 2 x 20 MHz of 2.6 GHz and 1 x 25 MHz of 2.6 GHz (unpaired) £790,761,000
Total £2,341,113,000

Ofcom press release in full

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