4G: The Winners…and losers?

The 4G auctions have been held and the winners have been announced.

Everything Everywhere; Hutchison 3G UK; Niche Spectrum Ventures, a BT subsidiary; Telefonica (O2); and Vodafone have all won permits to offer the faster 4G network.

The £2.34bn raised from the auction is much less than the expected £3.5bn predicted by the Office of Budget, which I reported in December.

I highlighted before, the claims that this auction was money driven by the Government in order for them to make a large profit. Did the network providers see through this plan? If this was the Government’s plan all along, it seems they were rumbled.

Ofcom chief executive, Ed Richards, continues to defend the notion that the Government were trying to maximise profits, but rather the focus is on providing a valuable and affordable service.

His statement on the Ofcom website states, “This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country.”

If we compare this bidding war to the one for 3G back in 2000, which raised £22bn, this auction appears to have had a disappointing result for the Treasury. On the other hand, I expect the operators are delighted the costs were not as high as originally thought.

But who are we to complain? The low auction costs should ultimately mean lower bills for the consumer.

So what’s next?

The final stage before the new networks are opened is the ‘assignment stage.’

This process will basically decide the location of the different provider’s spectrums. All that will be left to do is for the license fees to be paid, before the operators can start providing to customers. This could be as early as Spring 2013.

Are you 4G ready? Will you be rushing to sign up for a faster service?

No comments yet.

Leave a Reply