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Delayed 4G Mobile Broadband Spectrum Auction Could Cost UK GBP366m

Posted: 04th Oct, 2011 By: MarkJ
4g uk mobile broadbanduk mobile auction costsA new study from the Open Digital™ Policy Organisation has claimed that the recently announced delay of 3-6 months to Ofcom's forthcoming UK auction of 4G / LTE based next generation superfast Mobile Broadband radio spectrum (800MHz and 2.6GHz) could cost the economy up to £366m due to time wasted waiting for slow mobile internet downloads.

The research looked at the speed, capacity and coverage improvements of next generation Mobile Broadband and estimated that over 37 million business hours per year could be saved by using the faster services. Furthermore it predicts that if Ofcom were to require a more ambitious roll-out target from operators then the time saved by UK businesses (time is money) could be worth £732 million per year (estimation accuracy of +/- 25%).

James Firth, Report Co-Author and CEO of Open Digital, warned:

"Visitors to Britain will first notice London’s lack of 4G mobile data when they arrive for the Olympics next year. In addition to the lost time through slow mobile data, UK businesses won’t be able to fully benefit from new cloud-based business tools until the UK has a nationwide reliable high speed mobile data network."

Ofcom's present timetable envisages the first 4G services becoming available towards the end of 2013 (it would then take until 2017 to complete a national rollout), although this looks set to slip into 2014 after legal threats by O2 threw a spanner into the works (here).

Trefor Davies, CTO of Business ISP Timico UK, commented (blog):

"I’m not sure what the right answer is here, other than to cut through the red tape and just get on with things. Life is never that simple. We only have to look at the outrageously indecent haste with which the Digital Economy Act was rushed through parliament to see what can go wrong with trying to speed things up.

Also big organisations with large legal departments are masters of the tactical delay and in this case the stakes are high with mobile data being seen as one of the major growth areas over the next few years driven by the smart phone revolution and the adoption of the cloud."

It's worth pointing out that this research was conducted before yesterday's announcement, which saw the UK government raise their mobile coverage commitment from 95% of the population to 99% (here). Sadly Ofcom stands almost no chance of being able to speed up its auction process, which many had already regarded as being quite optimistic.

However, imposing a more ambitious roll-out schedule upon mobile operators might not be necessary. Several operators, such as O2 UK, have already begun building 4G capability into their network upgrades. Market competition is a powerful incentive.
Open Digital™ Policy 4G-Auction Study
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