UK telecoms regulator Ofcom has confirmed that 4G/LTE spectrum auctions will commence by the end of the year, with services likely to be rolled out in the second half of 2013.

In order to ensure a competitive market, Ofcom has decided to reserve some of the spectrum for a fourth national wholesaler other than the three largest incumbent operators, Everything Everywhere, O2, and Vodafone. This reserved spectrum could either go to the UK’s smallest operator, 3 UK, or a new entrant.

The plan is for the auction process to start before the end of 2012 when interested parties will be invited to formally apply to take part. Once Ofcom has selected the bidders, the bidding phase is pencilled in for early 2013.

This timetable should mean LTE services will begin to be rolled out from mid-2013, with services offered to consumers later that year. This is broadly in line with the timetable previously outlined by Ofcom.

The 800MHz and 2.6GHz spectrum bands will be offered in the auction, with a total of 250MHz of additional spectrum being offered compared to the 333MHz already in use. The amount of spectrum offered will be 80 percent more than was released as part of the 3G auction in 2000.

The 800MHz is part of the digital dividend spectrum resulting from the switch from analogue to digital TV signal, and is aimed at ensuring wide coverage. The 2.6GHz spectrum band is more suited to delivering the capacity for higher speeds. The mix is aimed at achieving wide coverage and delivering the necessary capacity to cope with demand in urban areas.

Ofcom chief executive Ed Richards said the auction has been designed to deliver “the maximum possible benefit to consumers and citizens across the UK”. The spectrum to be auctioned should see mobile broadband reach at least 98 percent of people in the UK.

One of the 800MHz licences will include the obligation to provide indoor reception for mobile broadband for at least 98 percent of the UK population by the end of 2017. Ofcom envisages that this licence will cover more than 99 percent of the population outdoors.

As well as the UK-wide obligation, Ofcom will also require the winner of the spectrum block to achieve indoor coverage for at least 95 percent of the population in England, Northern Ireland, Scotland and Wales. According to Ofcom, the outdoor coverage of such a network  is likely to be 98-99 percent for each nation.

Although Ofcom plans to hold the auction “as soon as possible,” a draft of the legal instrument that implements the auction rules still needs to be published and subject to statutory consultation, closing on 11 September.

The UK 4G spectrum auction has previously been delayed due to opposition from operators about how the auction should work.  
Operators have been critical of the Ofcom rules to ensure 3 UK acquires sufficient spectrum, while also giving provisional permission to Everything Everywhere to roll-out LTE services on 1.8GHz spectrum it already holds.

An Ofcom-led consultation regarding the Everything Everywhere proposal threw up a number of issues in May, which Ofcom is currently considering. Telefonica (O2) and Vodafone argued that allowing Everything Everywhere to use its spectrum would give it an unfair first-mover advantage.