UK 4G Auction Begins

24th January 2013

Ofcom has finally launched the UK auction for the fourth generation spectrum, in the largest spectrum auction ever, almost a year behind schedule.

Seven bidders – EE, o2, Vodafone, Three, HKT, Niche Spectrum Ventures (BT) and MLL Telecom – are all submitting secret bids online over an encrypted connection, ensuring no bid details will leak to the public.

The auction begins just as EE lowered the tariffs for their already launched 4G services in order to attract users at the lowest levels of data consumption but also the very high-end users.  It is now possible to get a 4G package for just £31 a month on a 24-month plan.

It will take a period of several weeks to determine the outcome of the bidding war.  Ofcom states a price for each “lot” of spectrum, and each bidder specifies which combination of “lots” they would like to buy and at the given price.  Prices for each lot increases based on how in demand it is, until the excess demand exceeds the supply the lot provides.

Ofcom Chief Executive Ed Richards believes it will “release the essential raw material for the next wave of mobile digital services”.

Delays to the project had been caused largely by legal challenges from companies looking to defend their commercial interests – largely down to Ofcom’s decision to allow EE to launch the service in several UK cities before it’s competitors.  The auction was initially due to take place at the start of 2012.

 

Robin James

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