4G UK: Auction winners revealed; more carriers to roll out 4G this year

The United Kingdom's first 4G mobile services finally launched in October of last year from EE, the joint venture company behind Orange and T-Mobile in the UK. EE had been given special dispensation by the UK's telecommunications regulator, Ofcom, to convert some of its existing unused 3G spectrum in the 1800MHz band for 4G usage, enabling it to launch next-generation mobile services before its rivals had even been given the chance to acquire 4G licences. 

Following complaints by other network operators, Ofcom agreed to accelerate the process of allocating spectrum, and in December it confirmed that a major step in that process - an auction in which interested parties would competitively bid for spectrum - would soon commence. That auction process began last month, and today, Ofcom announced the winners that had successfully bid in the auction. 

Following over fifty rounds of bidding, five companies emerged as winners, having competed to acquire chunks of a total of 250MHz of spectrum in the 800MHz and 2600MHz bands:

  • Everything Everywhere Limited (including EE 4G, T-Mobile UK and Orange UK): 2 x 5MHz of 800MHz / 2 x 35MHz of 2600MHz -- £588.88m
  • Hutchison 3G UK Limited (which operates the Three network): 2 x 5MHz of 800MHz -- £225m
  • Telefónica UK Limited (including O2 and giffgaff): 2 x 10MHz of 800MHz -- £550m
  • Niche Spectrum Ventures (a subsidary of BT Group plc): 2 x 15MHz of 2600MHz / 1 x 20MHz of 2600MHz (unpaired) -- £186.48m
  • Vodafone Limited: 2 x 10MHz of 800MHz / 2 x 20MHz of 2600MHz / 1 x 25MHz of 2600MHz (unpaired) -- £790.76m

Telefónica's purchase of 800MHz spectrum comes with special obligations; the carrier must "provide a mobile broadband service for indoor reception to at least 98% of the UK population (expected to cover at least 99% when outdoors) and at least 95% of the population of each of the UK nations - England, Northern Ireland, Scotland and Wales - by the end of 2017 at the latest". 

The auction raised a total of £2.34bn, significantly less than the auction for 3G spectrum in 2000, which raised around £22bn. The amount raised from the 4G spectrum auction is also a good deal less than had been expected; the UK Government's own figures had anticipated that closer to £3.5bn would be raised. 

With the completion of the main spectrum auction, the successful bidders now have until the end of the day tomorrow to pay their respective bills. The final stage in the auction process will determine precisely where each winner's spectrum will be allocated in the 800MHz and 2600MHz bands. Once this "assignment stage" is complete, Ofcom will formally grant licences to operate in those bands, and carriers will be free to begin establishing their 4G networks, with services expected to launch as soon as late spring of this year. 

This will no doubt be welcomed by UK consumers, who have so far reacted somewhat indifferently to the availability of 4G services, thanks in no small part to the high prices and miserly data allowances offered by EE on its 4G tariffs. While its 3G customers are offered unlimited calls, texts and data for £41 a month (albeit with a 4Mbps downstream speed restriction), 4G customers get just 1GB of data included for the same price, while also paying more up-front for identical handsets (a SIM-only tariff is also available at this price with 8GB of data included). 

The availability of competing 4G services, breaking EE's monopoly on 4G in the UK, will undoubtedly result in lower prices and better value for consumers. The Three network has already committed to offering 4G LTE services to its customers using its 'Ultrafast' (DC-HSDPA) network at no extra cost. 

Source: Ofcom

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Had LTE here in Canada and ended up switching back to HSPDA+ because on LTE my battery life halved.

I can live with 10-15Mbit on H+ over 30-40Mbit on LTE.

hspa+ is more than fast enough for quite some time to come. I'll let the rich people buy the lte and 4g connections that cost a fortune and give a tiny data allowance, suckers

Huh? No one but EE has even announced pricing. EE are the only people offering 4G in the UK at the moment, so obviously its going to be expensive right now. The other winners of the auction mentioned in the article will likely release cheaper offerings, which will cause EE to lower their price. Wait till spring, it wont be much more expensive than 3g when they all have 4G offerings.

Except this doesn't really break EE's monopoly on 4G in UK as they have now got the lion's share of 4G as they already have parts of 1800MHz (less the 2 x 15MHz bits Three bought from them) as well as what they were allowed to bid for.

I can't wait until the summer, I'll be sticking with Three and upgrading to an LTE equipped device for sure. Due an upgrade anyway, so why not upgrade to 4G?

Depends on the price. I'd happily upgrade to 4G, but £40 per month + some of the phone cost is too much, and I don't see them going far under that. Hell, I'm paying £35 a month and that's still way too much. They're going to want to undercut EE, but not by too much.

Exactly. And as Three are getting a decent chunk of 800Mhz spectrum, hopefully their patchwork network will be a thing of the past.

That's cool ill stick with Unlimited 4meg on 3G at least until the prices warrant paying for a new handset which will be at least a year no doubt.

I'm really surprised that 4G bids came in even that high, but that's because I've not had any trouble (This as a truck driver) finding wifi hotspots, so for me at least, the speed wasn't an issue, and when I did have to use mobile data, I didn't mind the few extra seconds it took to load up navigation routes.. But that was just me.