Auction could slap £4bn price tag on 4G

By CLAIRE SMITH
Published on 25/07/2012 00:00

THE auction of fourth-generation (4G) mobile spectrum will be under way by the end of the year and is expected to raise at least £4bn for the Treasury.

Ofcom yesterday announced details of the auction – which uses the frequencies formerly occupied by terrestrial television – and will lay the foundations for 4G networks to be laid out across the UK.

Although the new technology is unlikely to be available across the UK until 2015, it will make faster mobile data speeds available for phones and other wireless devices.

Ed Richards, Ofcom chief
executive, 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 e-mail attachments on their mobile device from almost every home in the UK.”

All the leading phone operators and some new players are expected to bid for the spectrum, which has been divided into lots. However, industry experts said the bidding frenzy would be unlikely to reach the heights of the 3G auction in 2000 – which raised £22.4bn.

Stephen Heamden, director of telecom for Intellect, the trade association for the UK technology sector, said: “The minimum price which could be raised would be £1.4bn but we expect it to go considerably higher than that.

“But it is unlikely to reach the dizzy heights of 2000 – when bidding went on for 100 rounds.

“This sale of the spectrum formerly used by terrestrial television has been rolling out across Europe. If we take other countries like Italy and Germany as an indication, then around £4bn would be a reasonable estimate.”

Ofcom say the auction will begin before the end of this year, with prospective bidders required to apply to take part.