Disappointing 4G auction sees Vodafone emerge as highest bidder for £791m

Written on:February 20, 2013
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Vodafone wins 4G auction

Vodafone wins five chunks of spectrum in 4G auction

Telecom regulator Ofcom’s 4G auction has raised only £2.34bn, falling well below the expected level of £3.5bn, with Vodafone emerging as the highest bidder winning five chunks of spectrum for £791m. Other winning bidders include Everything Everywhere (EE), Hutchison 3G UK, Niche Spectrum Ventures, which is a BT subsidiary; Telefonica (O2).

The biggest operator EE, which has already launched 4G services in major British cities using its existing airwaves, paid £588.9m to buy more to extend coverage countrywide, while O2, owned by Telefonica, paid £550m for two tranches. Ofcom, however, reserved airwaves for a fourth operator in order to keep the market competitive. Hutchison 3G, the operator of fourth-placed Three, paid £225m to win the bands.

Ofcom auctioned the spectrum in two bands, 800MHz and 2.6GHz, equivalent to two-thirds of the radio frequencies currently used by wireless devices, such as tablet computers, smartphones and laptops.

In a statement, the telecom regulator said, “This (4G) is expected to lead to faster mobile broadband speeds, lower prices, greater innovation, new investment and better coverage. Almost the whole UK population will be able to receive 4G mobile services by the end of 2017 at the latest.” 4G coverage is expected to extend far beyond the existing services covering 98% of the UK population.

4G can supply data stream feeds typically five times faster than 3G. However, it may be noted that the 4G auction netted far less than the 3G auction in 2000, which raised £22bn. In real terms, the 3G windfall would be worth more than £30bn today, which is more than 12 times the revenue raised on 4G.


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