4G Auction Raises Peanuts for troubled UK Gov

4G Auction Raises Peanuts for troubled UK Gov

You may remember way back in the year 2000 that various mobile operators in the UK were bidding on the rights to operate within the 3G spectrum. This was big news at the time and we did not really know what was around the corner. We were still all on our old Nokia’s playing snake back then and had not really used our mobiles much for internet access. Over the years we all upgraded gradually to more modern handsets and now having smart phones with 3G is the norm. The year 2000 3G auction raised a whopping £22.5 billion for the UK government and is believed by many economists to have subsequently led to the telecoms crash the following year. With the history books now well documented, this week telecoms operators were a lot more reluctant to pay over the odds for usage of the new 4G spectrum.

What a flop?

In comparison, the 4G spectrum auction failed to live up to the hype of its predecessor and raised a mere £2.3 billion. Winning bidders included Vodafone, BT, Three, EE and 02 while MLL telecom and HKT telecom lost out. EE who were the first mobile operator to offer 4G services back in October last year significantly added to their existing spectrum and have already sold some of the spectrum to mobile operator Three. Vodafone was the top bidder spending a huge £790 million on the spectrum.

What? We have to wait till 2017?

Unlike 3G, the government has promised that 4G will be in 98% of the UK by the end of 2017. This will be good news for those of us who live/work in areas still unable to take advantage of 3G mobile broadband which has actually been around for nearly 5 years now. With lots of 4G spectrum space now acquired the wait is on for other mobile operators to bring their 4G hardware and services to market to rival those of EE which has been the sole 4G UK operator for the past 5 months.

The good news

I think the 4G auction has overall been a good win for both the consumer and the mobile operators themselves. With a range of mobile operators in the mix all fighting over our loyalty it can only lead to ever competitive pricing and consumer savings in the long run. My only concern is that operators like 02 were able to get lower bids accepted under the promise that they will support the whole of the UK with 4G coverage by the end of 2017. 02 have so far acquired 16% of the 4G spectrum which is only 3% more than rivals Three; who in comparison have only a 3rd of the total customers 02 does. This could be a bit of squeeze and compromise the performance within their spectrum range.

However, all in all I guess it’s safe to say the 4G race is now well and truly underway and there are some exciting times around the corner. For now though we will have to wait until this summer or possibly the end of the year to see how the competition is stacking up.

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