Is Speedy LTE Finally Coming To The UK? Ofcom Sets 4G Auction For Early 2013

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It’s been a very long time coming, but the UK regulator Ofcom has finally revealed plans for the auction of 4G spectrum, which means that by late next year the UK may, finally, start to see a commercial rollout of 4G services like LTE. Bidding in the auction, for spectrum in the 800 MHz and 2.6 GHz bands, is likely to start in early 2013. It will be the largest-ever spectrum auction in the country, some 80 percent bigger than the 3G auction that saw billions of pounds invested by operators in 2000. And ultimately, the sale will mean at least 98 percent of the UK will have access to mobile broadband.

The regulator has been performing a fine balancing act over the last couple of years on this issue — with larger operators O2, Vodafone and T-Mobile/Orange (the Everything Everywhere JV), wanting to ensure they get sizeable shares of spectrum to serve their existing customer bases, doing battle with smaller operators worried about getting shut out of the process. In the past, that has spelled frustrating delays for all concerned. Today Ofcom hit back, saying “reports of delays are way off the mark.” Its solution to the bunfight? It will give a crack at the spectrum to the three biggies, but would also reserve a tranche for a fourth party, a wholesaler like Hutchison 3G or someone else.

Ofcom makes a very big point of not mentioning what technologies will be used on the 4G spectrum. Mobile operators are almost certainly going to go with LTE services, but there is also the possibility of WiMax in its many forms, mesh networks and more.

The 4G auction has been designed to deliver the maximum possible benefit to consumers and citizens across the UK,” Ed Richards, Ofcom Chief Executive, said in a statement. “As a direct result of the measures Ofcom is introducing, consumers will be able to surf the web, stream videos and download email attachments on their mobile device from almost every home in the UK.”

Ofcom notes that the 4G auction will offer at least two spectrum bands – 800 MHz and 2.6 GHz, with the lower frequency 800 MHz band part of the ‘digital dividend’, which is ideal for widespread mobile coverage (this is the spectrum appropriated from broadcasters). The higher frequency 2.6 GHz band will have a shorter range but will be able to carry faster speeds. Together the spectrum will add up to 250 MHz of additional mobile spectrum, Ofcom says. Today there is 333 MHz in use.

Ofcom has also started to lay out some of the requirements for coverage:

– The spectrum will be released in “lots” and one of the 800 MHz lots will carry an obligation to provide a mobile broadband service for indoor reception to at least 98% of the UK population by the end of 2017 at the latest.

– There will be a requirement to ensure 95 percent coverage indoors as well among each UK nation — England, Northern Ireland, Scotland and Wales.

– Another consultation is being set for September 11 for the “legal instrument” for implementing the auction.

– The full whack of Ofcom documents on the 4G spectrum sale — including details on specific spectrum tranches and regional rollouts — can been accessed here.

Update: as for how much might get raised in this 4G auction, Ofcom and observers seem to agree that it won’t be near the £22 billion+ spent on 3G over a decade ago. Part of this may be down to operators being less heady than the last time around. Dean Bubley told ZDNet it might raise as much as £4 billion; Ofcom meanwhile says raising money is not its primary goal.

– Meanwhile, Vodafone has weighed in with a complaint about Ofcom’s documentation (over 1,000 pages, it notes) but is generally positive in its response: “A competitive market for the next generation of mobile internet services will bring substantial benefits to British consumers, businesses and the wider economy. Ofcom appears to have created a mechanism to deliver the spectrum needed to run competitive 4G services and we welcome the work it has done. We also support the regulator’s desire to see 4G services delivered to as many people as possible. However, we will obviously need to study today’s lengthy documents to make sure they deliver the fair and open auction that this country needs.”

[Image: Mark Fischer, Flickr]