4G auction bidding to start early 2013


Regulator sticks with protection for fourth operator and 98 per cent coverage requirement in rules which will shape the auction

Bidding in the 4G spectrum auction will kick off in 2013 after Ofcom unveiled its timetable and rules for the auction.

Ofcom will assess applications for the auction at the end of this year, before a “bidding phase” expected to start in early 2013.

Though bidding will take place slightly later than the late 2012 deadline previously expected, Ofcom says it still expects operators to begin rolling out 4G services by the middle of 2013.

Following two consultations on the auction held in March 2011 and January this year, Ofcom has set rules for the auction which include measures to ensure the UK has four credible mobile operators and minimum coverage requirements attached to some of the spectrum on sale.

In total, Ofcom is selling rights to 250Mhz of spectrum in the 800 and 2.6 GHz ranges.

The regulator has decided to reserve a minimum amount of spectrum for a fourth UK operator, which it said could be Three or a new entrant to the market.

The operator also plans to make the buyer of one lot of 800MHz spectrum promise to provide coverage to 98 per cent of the population by 2017.

800MHz spectrum is better suited to providing broad coverage, while the 2.6 GHz spectrum is ideal for delivering high data speeds.

The operator which buys the spectrum will also have to ensure it provides at least 95 per cent coverage in each of the UK’s four nations, England, Scotland , Wales and Northern Ireland, to ensure that a particular part of the UK does not miss out.

Though the coverage requirements will only apply to to operator which buys the chunk of 800MHz spectrum with the conditions attached, Ofcom said it esxpects other operators to follow suit due to competitive pressures.

However, the regulator has avoided laying out what it plans to do about annual licence fees for spectrum already owned, saying that it will carry out a further consultation on the topic.

Both the protections for a fourth operator, and the coverage requirements were contained in Ofcom’s most recent consultation document on the auction, published earlier this year.

Ofcom is now publishing a legal instrument to establish the rules for the auction, which will then be open to statutory consultation until September.

Ofcom CEO Ed Richards said: “The 4G auction has been designed to deliver the maximum possible benefit to consumers and citizens across the UK.

“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.”