4G auction bidding to start beginning of 2013
Bidding in the 4G spectrum auction will kick off in 2013 after Ofcom unveiled its timetable and rules for the auction.
Ofcom will assess applications for the auction at the end of this year, before a “bidding phase” expected to start in early 2013.
Though bidding will take place slightly later than the late 2012 deadline previously expected, Ofcom says it still expects operators to begin rolling out 4G services by the middle of 2013.
Following two consultations on the auction held in March 2011 and January this year, Ofcom has set rules for the auction which include measures to ensure the UK has four credible mobile operators and minimum coverage requirements attached to some of the spectrum on sale.
In total, Ofcom is selling rights to 250Mhz of spectrum in the 800 and 2.6 GHz ranges.
The regulator has decided to reserve a minimum amount of spectrum for a fourth UK operator, which it said could be Three or a new entrant to the market.
The operator also plans to make the buyer of one lot of 800MHz spectrum promise to provide coverage to 98 per cent of the population by 2017.
800MHz spectrum is better suited to providing broad coverage, while the 2.6 GHz spectrum is ideal for delivering high data speeds.
The operator which buys the spectrum will also have to ensure it provides at least 95 per cent coverage in each of the UK’s four nations, England, Scotland , Wales and Northern Ireland, to ensure that a particular part of the UK does not miss out.
Though the coverage requirements will only apply to to operator which buys the chunk of 800MHz spectrum with the conditions attached, Ofcom said it esxpects other operators to follow suit due to competitive pressures.
However, the regulator has avoided laying out what it plans to do about annual licence fees for spectrum already owned, saying that it will carry out a further consultation on the topic.
Both the protections for a fourth operator, and the coverage requirements were contained in Ofcom’s most recent consultation document on the auction, published earlier this year.
Ofcom is now publishing a legal instrument to establish the rules for the auction, which will then be open to statutory consultation until September.
Ofcom CEO Ed Richards said: “The 4G auction has been designed to deliver the maximum possible benefit to consumers and citizens across the UK. “As a direct result of the measures Ofcom is introducing, consumers will be able to surf the web, stream videos and download email attachments on their mobile device from almost every home in the UK”.
O2 and Vodafone give cautious welcome
O2 and Vodafone have cautiously welcomed the proposals for the 4G spectrum auction, but both operators are expected to pore over the more than 1,000 pages of the regulator’s final proposals before responding.
O2 has said that Ofcom’s final proposal for the 4G spectrum auction this year is a “significant step” towards 4G.
An O2 spokesperson said: “Ofcom’s detailed rules for the auction represent a significant step towards 4G launch in the UK.
“Whilst Ofcom has taken a number of our suggestions on board, they are combined with other changes to the previous proposals. We will need to study the package in detail before responding to the Notice on the Regulations, which puts the rules into law.”
Vodafone said it welcomed the work Ofcom had done.
“A competitive market for the next generation of mobile internet services will bring substantial benefits to British consumers, businesses and the wider economy. Ofcom appears to have created a mechanism to deliver the spectrum needed to run competitive 4G services and we welcome the work it has done.
“We also support the regulator’s desire to see 4G services delivered to as many people as possible. However, we will obviously need to study today’s lengthy documents to make sure they deliver the fair and open auction that this country needs.”
Last month O2 and Vodafone announced a network sharing agreement that is in part designed to speed their rollout of 4G services.
EE says Ofcom ‘moving in right direction’
Everything Everywhere has welcomed the proposals for the 4G auction which are set to be finalised on September 11.
The operator said that while it did not agree with all aspects of the rules Ofcom was planning to use for the auction, it was necessary to move the auction process forward as quickly as possible.
A spokesperson said: “Today’s publication of the 4G auction rules is a crucial step towards bringing the benefits of faster mobile speeds and better connectivity to Britain, as well as stimulating £5.5bn investment into the UK economy.
“While there are still some elements of today’s proposal which we don’t think are in the interests of competition or consumers, we are pleased that Ofcom is moving in the right direction and we recognise that we need to get this process moving now before the UK falls further behind the rest of the world.”
The operator also used the unveiling of the auction rules to reiterate its plea to be allowed to launch 4G services early on its existing 1.8GHz spectrum.
“The auction is only one step towards bringing 4G to Britain. Everything Everywhere is committed to bringing 4G to the UK this year, and the next milestone will be the regulator’s response to our request to roll out 4G over our existing 1800MHz spectrum without further delay.”