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February 20, 2013

Ofcom reveals winners of 4G mobile spectrum auction

£2,341,113,000 was raised although the auction was expected to generate at least £3.5bn.

By Tineka Smith

After more than 50 rounds of bidding Vodafone, Telefónica UK, EE, Hutchison 3G UK and Niche Spectrum Venutres have won spectrum.

Ofcom says the results of the auction means there will be strong competition in the 4G mobile market, which will lead to faster mobile broadband speeds, lower prices, better coverage and greater innovation.

The majority of the UK will be able to receive 4G mobile services by the end of 2017 at the latest.

250 MHz of spectrum was auction into two bands – 800 MHz and 2.6GHz.

"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," said Ed Richards, Ofcom chief executive. "We are confident that the UK will be among the most competitive markets in the world for 4G services."

"4G coverage will extend far beyond that of existing 3G services, covering 98% of the UK population indoors – and even more when outdoors – which is good news for parts of the country currently underserved by mobile broadband.

4G mobile spectrum winners must pay an outstanding balance to Ofcom before midnight on 12 February 2013.

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All proceeds from the auction will go to HM Government.

Ofcom estimates that the value of benefits that 4G services will provide to consumers over the next year will be £20bn.

Ofcom says that as 4G is rolled out over the coming months it s likely to make a substantial contribution to UK economic growth due to software development, employment opportunities and new mobile revenues.

Ofcom also plans to conduct research by the end of 2013 in order to inform customers about providers deploying 4G services in their areas and at what speeds.

The communications watchdog estimates that by 2030 mobile data demand could 80 times higher than it is today.

Ofcom announced last year that it’s preparing the UK for a 5G future in order to keep up with increasing demand.

Ofcom’s chief executive says that 4G may not meet mobile demands in the future and is preparing now to help avoid a possible ‘capacity crunch.’

However, some industry experts say that providing extra airwaves will not solv the mobile data demand problem.

"While it’s encouraging to see that Ofcom is being proactive by planning to make more spectrum available, extra airwaves alone won’t solve the problem of bulging mobile networks," Bruce Girdleston, senior business development manager at Virgin Media Business told CBR.

"Mobile network operators will almost certainly welcome the news of more available spectrum, but they’ll also be looking to make sure they have maximum bandwidth between their cell sites by taking advantage of fibre networks."




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