UK regulator Ofcom named the winners of the UK spectrum auction, although the £2.34 billion raised was below some expectations.
All four of the existing UK operators received at least some frequencies, with BT Group’s Niche Spectrum Ventures also picking up spectrum.
According to reports late last yet, the auction was expected to raise £3.5 billion for the UK government.
It was noted that the auction of 3G licences in 2000 netted £20 billion, with Ed Richards, chief executive of Ofcom, telling the BBC that “we are in very, very different times”.
In 2000, the tech sector was at a peak during the “dot com bubble”, with existing 2G mobile networks unable to deliver high-speed mobile data services.
In contrast, 2012 comes in the midst of global economic uncertainty and an on-and-off recession in the UK, with operators also facing an increasingly tough competitive environment – dampening any desire to spend big on frequencies even before taking into account associated infrastructure rollout costs.
Vodafone UK was the big spender, bidding £790.8 million for 800MHz and 2.6GHz paired frequencies, plus a 2.6GHz unpaired block.
Everything Everywhere paid £588.9 million for 800MHz and 2.6GHz allocations, which will be used alongside its existing 1.8GHz LTE network.
Telefonica won 800MHz block described as the “coverage allocation lot” for £550 million. The operator is obliged to provide services with indoor reception to at least 98 percent of the UK population (including at least 95 percent of the populations of each of the UK nations) by the end of 2017.
3 UK is paying £225 million for some frequencies in the 800MHz band. This operator has already announced a deal to acquire some 1.8GHz frequencies, also suitable for 4G services, from Everything Everywhere.
Finally, Niche Spectrum Ventures paid £186.5 million for 2.6GHz paired and unpaired blocks. In a statement, BT said that “the spectrum, which can be used to provide fast 4G connectivity, will enable BT to provide its business and consumer customers with an enhanced range of mobile broadband services, building on its existing strength in wi-fi”.
Ian Livingston, chief executive of BT, noted: “We have said that we do not intend to build a national mobile network. Instead, this spectrum will complement our existing strategy of delivering a range of services using fixed and wireless broadband.”
There is still one more stage in the process left, where operators will be assigned the actual frequencies they can use.
There were two unsuccessful bidders: MLL Telecom and HKT (UK).
In a statement, MLL Telecom said: “As a UK focused telecoms operator and existing spectrum owner we are naturally disappointed not to have won any allocated spectrum. The auction process has helped us analyse different markets and opened up a number of opportunities that we are pursuing.”
HKT is the owner of UK Broadband, which already offers LTE services using frequency allocations in the 3GHz and 3.6GHz bands.
Ofcom also noted that it is “planning now to support the release of further spectrum for possible future ‘5G’ mobile services”.