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Ofcom delays 4G spectrum auction

Auction unlikely to take place until Q2 of 2012 now

A government auction of the 800MHz and 2.6GHz radio spectrums that will allow mobile networks to offer 4G services has been delayed.

The spectrums will be used by the networks to offer faster mobile broadband services, with speeds thought to be as much as 'up to' 100Mbps, which can cope with a greater capacity than existing 3G services, as use of mobile broadband increases. The 800MHz band is currently used for terrestrial TV broadcasts, but the digital switchover means it can now be assigned for mobile broadband use.

Initially, Ofcom said the auction would take place at the beginning of 2012, with the terms of the auction expected to be published this month. However, following the threat of legal action by O2 in June this year, after the network claimed the auction was illegal under EU law. According to O2, because Vodafone and O2 already own some 900mhz spectrum, Ofcom intends to ensure that a certain amount of new 800mhz spectrum goes to their rivals. However, the network claimed the two spectrums weren't directly comparable and would give their rivals an advantage when all operators should start with a clean slate.

As a result, Ofcom has revealed the terms will not be made available until November, pushing the actual auction back to the second quarter of 2012.

"We are still aiming for the first half of next year. However, we have always maintained it is an ambitious timescale," Ofcom told The Guardian.

"This is a complex area, involving a large number of technical and competition issues that we need to consider and resolve before finalising proposals. For example, a very high proportion of households in the UK rely on Digital Terrestrial TV – Freeview – which needs to be relocated before 4G can be rolled out."

While O2, Vodafone and Everything, Everywhere - the parent company formed when T-Mobile and Orange merged – will not be affect by the delay as they all have spare 2G spectrum which Ofcom said in January could be reallocated to offer 3G services, smaller network 3 could be affected as it doesn't have any spare 2G spectrum and may run out of capacity to handle mobile broadband traffic before the auction begins.

David Dyson, chief executive of 3, told The Guardian any significant delay will further weaken competition to the detriment of UK consumers.

"Refarming 2G spectrum without any of the reallocation seen across Europe created an incentive for those gifted spectrum to delay the auction. Ofcom and the government need a clear plan to ensure their plans are not undone by narrow self-interest," he said.

In a move last week, that was seen by some as attempting to sway the government, 3 revealed it will provide 11 rural communities in the UK with free mobile broadband in a bid to help them get online.

Ofcom added that because technical issues need to be satisfactorily resolved before new networks can be built, "it will not be possible for mobile operators to start rolling out 4G networks until 2013 at the earliest regardless of when the auction itself actually takes place".

A spokesman for Everything, Everywhere said the network firmly believes the 4G auctions should be held as soon as possible "so the benefits of faster data speeds reach consumers quickly".

"We have followed the processes outlined by Ofcom as part of the auction consultation, and recommended that the auction design ensures that all operators – not just Vodafone and O2 – get fair access to sufficient low frequency spectrum. The sooner this happens, the better for all of our customers."


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