Telecoms regulator Ofcom has finally revealed plans for the auctioning off of the fourth generation bandwidth (4G) for mobile phone services. Although the announcement was greeted with some small sense of enthusiasm, it has to be said that it’s been a long time coming. There has been repeated criticism from telecommunications companies and businesses that Ofcom has been too slow getting its act in order, and that while it dithered in setting up the auction, our European counterparts have been forging ahead and creaming off a large slice of the new market. Ofcom, by contrast has blamed external factors like internal telecom litigation for the delay, and is at pains to point out that the roll out of the 4G service will still in line with its previous timetable.
The sales process for the auction will start later this year, but it is believed that bidding will not actually begin until early 2013. The regulator maintains that consumers will start to see the service rolled out between late 2013 and early 2014. The auction will offer the equivalent of three-quarters of the mobile spectrum currently in use – some 80 percent more than released in the 3G auction which took place in 2000.
However, Ofcom has also stipulated that it wants to see greater competition in the market which will drive lower prices. To that end it has suggested a new market entrant, Hutchinson 3G as a potential new operator, although this is not as yet set in stone. There are currently only 3 major players in the market: Everything Everywhere, (the merged operator of Orange and T-Mobile) Vodafone and Telefónica, which owns O2. A spokesperson for Ofcom told the BBC:
“In the interests of competition, Ofcom has decided to reserve a minimum amount of spectrum in the auction for a fourth operator. This could be either Hutchinson 3G or a new entrant altogether.”
During the auction period Ofcom will sell chunks of the radio spectrum to support future 4G mobile services: these will allow users to download data like music and video at considerably faster speeds. However, although the infrastructure is in place to use these services sooner, the regulator has insisted that the spectrum to support 4G services will not be made available until the latter end of 2013. Ofcom believes its plans should see mobilerolled out to at least 98 percent of people in rural areas across the UK by 2014.