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Ofcom to auction off licences for 4G mobile phone services

Telecommunications regulator Ofcom has announced plans to auction off licences for fourth-generation (4G) mobile phone services.

The 4G spectrum is expected to deliver the speed and convenience of home and office broadband connections to users of smartphones, laptops and tablet computers.

The auction of 3G licences in 2000 raised £22.5 billion for the Government from phone companies, though Ofcom chief executive Ed Richards declined to speculate on whether similar sums could be expected when the new spectrum goes up for grabs next year.

The auction will be held in the first quarter of 2012 and 4G services should be available from 2013, he said.

Richards told the BBC Radio 4 Today programme it was the latest generation of mobile technology and would offer services that offered more capacity and better coverage of mobile broadband services.

“That is what we expect this spectrum to be used for, but we are preparing an auction that will offer it on a neutral basis.

“It offers much better data services and therefore all the kind of things you can get on your broadband at home or in your office and that you aspire to do through your smartphone or tablet computer and so forth, that is exactly what 4G services will enable.”

Richards said it was a “fantastically important spectrum for the future of our economy”. “It is 80 per cent more spectrum than was offered in 3G in 2000 and it will be a crucial raw material for the future of the modern economy.”

The auction will cover two significant spectrum bands within the so-called “sweet spot” which is most suitable for mobile communications - 800 MHz and 2.6 GHz. It is equivalent to three-quarters of the mobile spectrum that is in use today.

Ofcom said 4G will be ideally suited for wide bandwidth data services such as video streaming, email, messenger services, GPS and mapping services and social networking sites.

Richards said the auction was “not only critical to the future of the UK mobile telecommunications market but it is also of significant importance to the wider economy”.

“It will support a wide range of data services that are fast becoming essential features of the modern world.

“Our role as the independent regulator is to award this spectrum in a way that secures the best use of the spectrum for the benefit of citizens and consumers in the UK,” Richards said.

That was why Ofcom was “proposing to design the auction in a way that not only encourages investment but also promotes competition and delivers wide coverage of services”, he said.

The regulator said it plans to enforce caps on the amount of the new airspace mobile phone service providers can win at auction to ensure fair competition in the market.

Ofcom has also proposed a coverage obligation for the sell-off, which would require the licensee to provide a mobile broadband service covering 95 per cent of the UK population.

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