Bidding for the UK’s largest ever mobile spectrum auction is now under way.
Everything Everywhere, HKT, Hutchinson 3G, MLL Telecom, Niche Spectrum Ventures (a subsidiary of BT Group), Telefonica and Vodafone are the seven companies bidding in the auction.
The new spectrum will almost double the amount of airwaves currently available for mobile broadband services on smartphones, tablets and laptops.
Ed Richards, Ofcom 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 UK is the most price competitive mobile phone market in Europe.
Healthy competition means that UK consumers benefit from better services at lower prices than most other countries in the world.
In order to maintain competition, Ofcom has designed the auction to ensure that at least four different operators have sufficient spectrum to be credible national 4G wholesalers.
The net benefit of doing this, for consumers and the UK economy as a whole, will be very significantly greater than any immediate financial benefits from revenue raised by the auction.
Bids are being placed online over secure connections, using software that has been developed specifically for the auction.
The bidding will continue over several rounds and is expected to take a number of weeks until the final winners are known.
No updates on bidding activity will be provided until the conclusion of the auction.
Due to the nature of the auction, information about the bids being placed remains confidential until the auction concludes to reduce any potential risk of strategic bidding which could distort the outcome of the auction.
Once fees are paid, licences will be granted, enabling operators to start rolling out new networks.
It is expected that services will be launched by a range of providers from late spring / summer 2013.
Bidders will be competing for 28 lots of spectrum in two separate bands – 800 MHz and 2.6 GHz.
The lower frequency 800 MHz band is part of the ‘digital dividend’ freed up when analogue terrestrial TV was switched off, which is ideal for widespread mobile coverage.
The higher frequency 2.6 GHz band is ideal for delivering the capacity needed for faster speeds.
These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.
Both bands are being packaged into smaller lots of spectrum for the auction.
This combination of low and high frequency spectrum creates the potential for 4G mobile broadband services to be widely available across the UK, while offering capacity to cope with significant demand in urban centres