UK mobile operators welcome 4G auction wins

Vodafone wins the most 4G spectrum and has the widest range, but EE remains the largest holder of spectrum followed by Vodafone, O2 and Three; fifth winner, BT, intends to use spectrum to boost its existing broadband services

UK mobile operators welcome 4G auction wins

The outcome of the UK’s 4G auction saw Vodafone UK winning the largest portion of the 800MHz and 2.6GHz spectrum on offer, but EE’s holdings remain the largest by some way. 

A calculation by EE shows the total market share for spectrum holdings in the UK post-4G auction as: EE - 40%; Vodafone - 31%; O2 - 16%; Three – 13%.

The actual breakdown is as follows:

Total spectrum holdings by operator

Spectrum             Vodafone             O2               EE              Three

800MHz                 2 x 10                   2 x 10          2 x 5           2 x 5

900MHz                 2 x 17.4                2 x 17.4        -                 -

1800MHz               2 x 5.8                  2 x 5.8         2 x 45          2 x 15

2.1GHz                  2 x 14.8                2 x 10          2 x 20          2 x 14.6

2.6GHz                  2 x 20                   -                  2 x 3            -

                             1 x 25 (unpaired)    -                  -                  -

Total (paired)        2 x 68                  2 x 43.2       2 x 105        2 x 34.6                

The spectrum licences are all indefinite in length and have an initial term of 20 years.

Vodafone UK

Vodafone UK will pay £790m for its new spectrum holdings. The operator said today (20 February 2013) that the spectrum award will support Vodafone UK’s plans to develop the next generation of mobile internet services, known as 4G, using Long Term Evolution (LTE) technology.

Vodafone UK chief executive Guy Laurence said: ‘We’ve secured the low frequency mobile phone spectrum that will support the launch of our ultra-fast 4G service later this year. It will enable us to deliver services where people really want it, especially indoors. This is great news for our customers. The next generation of mobile internet services will bring real benefits to both consumers and businesses.’

EE

EE will pay £588.8m for its spectrum. EE is the only UK operator to already offer 4G services after the UK telecoms regulator Ofcom allowed it to refarm some of its existing 1800MHz spectrum for 4G services last year. The move did not please EE’s rivals who complained it gave EE an unfair head start in 4G. None of the other operators were in a position to refarm their spectrum for 4G.

Olaf Swantee, chief executive of EE, said: ‘EE is extremely pleased with the outcome of the spectrum auction. Coupled with our existing 1800MHz 4G network, it consolidates our position as the most advanced, largest and most capable 4G operator in the UK. The acquisition of low and high frequency spectrum allows us to boost our superfast data services and coverage - indoors and outdoors, in cities and the countryside. 

‘This result means that we are perfectly placed to meet future data capacity demands - further enhancing the superfast 4G services we already offer the UK’s consumers and businesses. We look forward to continuing the rollout of the nation’s fastest mobile internet services.’ 

O2

O2 (Telefonica UK) – the UK’s second largest operator by subscriber numbers ended up with a surprisingly small amount of new spectrum – just 2 x 10MHz of 800MHz at a cost of £550m. It plans to launch its 4G services in the summer. O2 has taken on the 4G indoor coverage obligation to reach 98% of the UK population – Ofcom stipulated that one bidder must fulfil this demand.

Telefónica UK said that the acquisition of the 2 x 10MHz block of 800MHz spectrum underpins its commitment to ensure the widest and deepest possible reach for new services and will see O2’s 4G network provide indoor coverage to 98% of the UK population. The company has already begun upgrading its network grid to offer 4G capability.

Commenting on the auction outcome, O2 CEO Ronan Dunne said: ‘Today, Telefónica has made a significant investment in next-generation 4G technology for the UK. While 4G will indeed allow for faster data speeds and a more seamless mobile experience, it is our intention to go beyond what has already been offered in the market and give our customers a unique and exclusive range of digital experiences, marking a new generation for the mobile industry.

‘This is a truly landmark moment for the UK, presenting a wealth of opportunity to transform mainstream services to improve people’s lives. Now the investment has been made for 4G to become a nationwide reality, we want all organisations across all sectors to ensure the true value of 4G is realised, so that together we can make Britain truly digital.’

Three UK

Three UK has the smallest spectrum holding of any of the operators with just 2 x 14.6MHz of 2.1GHz spectrum. To compete successfully in the UK it needed more spectrum. Last year it boosted its position with the purchase of 2 x 15MHz of 1800MHz from EE, which had to divest the spectrum as part of an agreement with EU regulators for the merger between T-Mobile UK and Orange UK (which became EE) in 2009. 

Dave Dyson, chief executive officer, Three UK, said: ‘We have more than doubled our spectrum holdings in the past 12-months thanks to spectrum acquired at auction and outside the auction process. Doubling our capacity allows us to continue our growth with significant headroom to increase our current base of over 8m customers. 

‘Consumer appetite for enjoying the internet via mobile devices continues to grow, playing to our strengths. With a significantly increased spectrum holding we will continue to be the competitive force in the UK mobile market.’

BT (Niche Spectrum Ventures)

The other successful bidder in the auction was BT subsidiary, Niche Spectrum Ventures, which won 2 x 15MHz of 2.6GHz of paired and 1 x 20MHz of 2.6GHz of unpaired spectrum.

BT said that the spectrum won at a price of £186m, which can be used to provide fast 4G connectivity, will enable it to provide its business and consumer customers with an enhanced range of mobile broadband services, building on its existing strength in Wi-Fi.

Ian Livingston, BT chief executive, said: ‘We are pleased to have secured this spectrum. We have said that we do not intend to build a national mobile network. Instead, this spectrum will complement our existing strategy of delivering a range of services using fixed and wireless broadband. We want our customers to enjoy the best possible connections wherever they are and this spectrum, together with our investment in fibre broadband, will help us achieve that.’

See also: 

UK 4G auction of 800MHz and 2.6GHz raises £2.3 billion

Industry reaction to UK 4G auction results


Written by Wireless magazine
Wireless magazine

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