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UK 4G Spectrum Auction Could Raise Government As Much As £4bn

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Report suggests fierce competition could yield the treasury more than expected

The government could receive as much as £4 billion from the ongoing UK 4G spectrum auction after the first round of bidding was more competitive than expected, according to The Times.

Reserve prices for the 28 lots of spectrum up for grabs have been conformed at a combined £1.3 billion, but fierce competition among rival bidders could see the treasury receive more than the £3.5 billion it had hoped to raise.

Ofcom has now closed the first round of bidding and is expected to reveal the results later this week, with major networks EE, O2, Vodafone and Three all submitting bids, along with BT, PCCW and MLL Telecom.

UK 4G spectrum auction

4G © De Mango Shutterstock 2012The operators will receive the news five minutes before the results are made public, with further rounds of bidding taking place over the next few weeks to ensure that all the lots of spectrum have been sold.

The first round of the auction has been conducted in secret to prevent one operator acquiring too much spectrum or tactically bidding so that its rivals have to pay more. Ofcom’s disclosure will be the first time that the bidders see how much spectrum they have won and how much they will have to pay for it.

These participants are bidding for different combinations of 800MHz and 2.6GHz spectrum. Together, the two bands will add up to 250MHz of additional mobile spectrum, compared to 333MHz in use today. Ofcom has called the auction “the largest ever sale of mobile airwaves in the UK.”

EE currently operates the UK’s only 4G network after it was granted permission to launch an LTE service using its existing 1800MHz spectrum, however other operators are expected to follow suit later this year.

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