Ofcom UK Opens Bidding in Superfast 4G Mobile Broadband Auction

The UK communications regulator, Ofcom, has today opened the bidding process for its auction of 4G (LTE or WiMAX) superfast Mobile Broadband radio spectrum (800MHz and 2.6GHz). A total of seven firms are bidding, although the main focus will be on the four primary mobile phone operators.

Each of the bidders have had to stump up an initial deposit of £100,000 and the reserve price for the related spectrum comes to a “combined total” of £1.36 billion. Estimates suggest that the auction itself could rake in anything from £4bn to £6bn (well below the overpriced 3G auction that created £22bn).

The following lots are being auctioned:
– 800 MHz paired – 5 lots
– 2.6 GHz unpaired – maximum of 14 lots
– 2.6 GHz concurrent low power – maximum of 10 lots
– 2.6 GHz unpaired – 9 lots

The seven eligible firms include EE, HKT UK (PCCW / UK Broadband), Three UK, MLL Telecom, Niche Spectrum Ventures (BT), O2 (Telefonica) and Vodafone. We suspect that BT, MLL Telecom and HKT are more interested in using the spectrum primarily for business, public sector and or general capacity supply purposes.

Ed Richards, Ofcoms Chief Executive, said:

“Today’s 4G auction is a very significant milestone for the UK’s communications sector. It will release the essential raw material for the next wave of mobile digital services. This will change the way we consume digital media in both our personal and working lives and deliver significant benefits to millions of consumers and businesses across the country.”

The auction itself, which will take place online over secure connections, is expected to last several rounds and “take a number of weeks” to complete. The bidders will be informed about whether or not they’ve won during late February or March 2013. The first 800MHz and 2.6GHz based 4G spectrum will then be released for commercial use during late spring or early summer 2013 (most likely by June 2013).

Ofcom states that no further updates on bidding activity will be provided until the conclusion of the auction because doing any different could potentially damage the process.