UK’s 4G auction gets under way, as seven bidders compete for 28 lots of mobile spectrum

Ofcom, the UK’s communications regulator, today announced that it has opened bidding for the mobile spectrum auction in the UK, allowing seven pre-confirmed parties to begin submitting bids for 28 lots of two LTE bands ahead of a late spring/early summer launch.

As announced previously, the auction will be contested by EE, HKT, Hutchinson (Three), MLL Telecom, Niche Spectrum Ventures (a subsidiary of BT), Telefónica (O2) and Vodafone, who will fight over a new spectrum that will almost double the network airwaves available for mobile data and wireless broadband services on connected devices.

With continued smartphone and tablet growth, the UK is one of the most competitive markets in Europe, which will almost certainly ensure that the auction will be hotly contested and see bids run into the hundreds of millions as carriers and other companies fight over precious mobile spectrum.

Ofcom has already split the auction so that at least four different carriers can acquire enough spectrum to offer 4G services on wholesale. This will provide smaller companies with access to 4G services, similar to the deal that Phones 4u signed with EE to launch LIFE Mobile.

Bids will be placed remotely and in secret, using software that has been created with the sole purpose of handling bids for the LTE 4G spectrum. Bids will be anonymous, and other parties will not know what their rivals are paying. Ofcom expects bidding to continue over a number of rounds, and could take a number of weeks, if not months.

EE, O2, Three and Vodafone are expected to bid for the lower 800MHz frequency, which is suited for longer distances and better penetration in cities and towns, while wireless broadband providers may look to boost their services with bids for the 2.6GHz spectrum.

Both bands add up to 250MHz of additional mobile spectrum, on top of the 333MHz available today.

As soon as bidding is over, Ofcom will receive the fees, hand out licenses and allow operators to begin rolling out their services. At this time, it is believed they will be available come late spring/early summer of this year.

EE will continue to enjoy its 4G exclusivity for a number of months while its rivals fight it out in the auction. Once it has been decided, UK consumers can expect carriers to lower prices in a bid to better the competition.

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