Following over 50 rounds of intense blind bidding, Ofcom has announced that all five winning bidders of the UK’s 4G LTE auction have secured valuable 800MHz spectrum.
Ofcom auctioned off a total of 250 MHz of spectrum in two separate bands. The lower-frequency 800 MHz band is part of the ‘digital dividend’ which was freed up when analogue terrestrial TV was switched off last year, and will result in better in-building coverage.
The higher-frequency 2.6 GHz band, which is ideal for delivering the capacity needed for faster speeds, was acquired by Vodafone, EE and BT.
Vodafone spent €906 million – the most of all the winners – on 2 x 10MHz in the 800MHz band, 2 x 20MHz in the 2.6GHz band plus an additional 25 MHz of unpaired spectrum in the 2.6 GHz band.
CCS Insight analyst Kester Mann said this was “a statement of intent to re-gain standing in its home market where it is now third-ranked player”.
EE won 2x5MHz 800MHz and 2x35MHz of 2.6GHz, at a cost of €674 million, which adds to the existing 1800MHz spectrum it already owns.
O2’s parent Telefónica spent €628 million to secure 2x10MHz of spectrum at 800MHz that has a coverage obligation attached to it.
As a result, it is obliged to provide a mobile broadband indoor coverage service to at least 98 percent of the UK population and at least 95 percent of the population of each of the UK nations by the end of 2017.
Mann said this could lead to a more expensive network deployment in the long term.
Further, he said O2’s failure to secure frequencies at 2.6GHz “may mean it struggles” to meet growing data needs from its customers.
Three spent €257 million on 2x5MHz of 800 MHz, which Ovum analyst Matthew Howett said puts it in a strong position.
“Three’s ability to win valuable 800MHz spectrum coupled with the spectrum at 1800MHz it acquired from EE before the auction puts it in a strong position to roll out its 4G network,” he said.
“Many customers on Three will have had problems at one point with reception inherent of the propagation characteristics of the 2.1GHz spectrum it currently uses.”
BT subsdiary Niche Spectrum Ventures, meanwhile, paid €213 million for 2x15MHz of 2.6 GHz and unpaired spectrum of 1x20MHz of 2.6GHz.
Ofcom CEO Ed Richards said in a statement: “4G coverage will extend far beyond that of existing 3G services, covering 98 percent of the UK population indoors – and even more when outdoors – which is good news for parts of the country currently underserved by mobile broadband.”