Ofcom UK Delay 4G Superfast Mobile Broadband Auction Bids to Early 2013

Ofcom, the UK communications regulator, has today unveiled its final proposal for the forthcoming auction of “4G” (Long Term Evolution) based superfast Mobile Broadband spectrum (800MHz and 2.6GHz). But sadly, due to constant bickering between operators, the first bids won’t take place until “early 2013“.

The regulator’s proposal aims to extend the UK coverage of related services (licenses) from 95% to “at least” 98% of the UK population by the end of 2017 “at the latest” and, despite legal warnings from O2 (here), continues to “reserve a minimum amount of spectrum in the auction for a fourth operator“. Ofcom states that this could be used by either Three UK or “a new entrant altogether“.

Ed Richards, CEO of Ofcom, said:

“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.”

But some rival operators will see the decision to reserve spectrum for a fourth operator as unfair and could attempt to delay the process through the courts. Three UK’s CEO, David Dyson, last year claimed that rivals O2 and Vodafone already have an “unfair competitive advantage” because they are allowed to repurpose their current 900MHz and 1800MHz radio spectrum for use by existing 3G (and possibly 4G) based mobile services. As a result Dyson suggested that both were now, “incentivised differently to defer [the auction] for as long as possible“.

Meanwhile Ofcom’s original timetable for the release of 4G spectrum envisaged the first bids being made in Q1-2012, although this stage was last year delayed to Q4-2012 (here). Curiously today’s proposal expects the auction to “get under way by the end of 2012“, yet later causes confusion by confirming that the bidding phase isn’t actually “likely” to begin until “early 2013“.

Never the less Ofcom remains adamant that the first 4G services remain on-target and indeed their current ambition, which predicts that “mobile operators are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and to start offering 4G services to consumers later that year“, appears to still support their original timetable (it’s often forgotten that Ofcom built flexibility into their plan because it expected some of the above problems).

Finally the regulator has accompanied today’s announcement by publishing a draft legal instrument, which will officially implement their auction rules. However this is still subject to a statutory consultation closing on 11th September 2012. Any operator contemplating legal action is likely to do it before that consultation finishes. All eyes will be on O2, with Vodafone appearing to welcome today’s announcement and Everything Everywhere being unwilling to upset its chances of gaining access to 4G over the 1800MHz band before Q4-2012 (here).

As a side note the government recently set out terms for a £180 million scheme to help 900,000 UK homes avoid the loss of Freeview Digital TV (DTV) services, which is expected to be disrupted by interference from “4G” services (here).