opinion


UK 4G auction: seven bidders raises the prospect of an upset for one of the incumbents

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The presence of BT and PCCW – which owns fixed-wireless 4G operator UK Broadband – among the bidders in the UK’s upcoming 4G spectrum auction has put a new twist on the narrative for the country’s mobile market. In the run-up to the auction, which will see regulator Ofcom sell off the 800MHz and 2.6GHz frequencies, the perceived wisdom was that challenger operator 3 UK would pick up the 800MHz block reserved for an operator that holds no sub-1GHz spectrum, and the rest would be business as usual. However, with these companies entering the fray, the picture becomes much murkier.

UK Broadband’s stated aim is to expand its offering to include mobile broadband along with the fixed-wireless 4G it currently offers in four areas. Meanwhile, BT is likely to use the spectrum for enterprise solutions to be able to better compete with Vodafone, which earlier this year acquired enterprise operator Cable & Wireless Worldwide. This means both are likely to be aiming for the 2.6GHz blocks, and raises the possibility of an upset for one of the existing players – although there are enough blocks on offer that, in theory, everyone could win something.

As for the 800MHz band, not winning it would further weaken 3 UK’s ability to compete, as it would  be unable to overcome its long-standing handicap of not having access to sub-1GHz spectrum; if this happened 3 UK would need to reconsider its long-term prospects in the UK market.

Whatever the case, with seven players bidding for these bands instead of the four that most observers expected, those who do win may once again find themselves paying heavily for their network expansion. While this will be good for the UK Treasury, it may lead to another few years of lost opportunity for network innovation by the operators.

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