Of the seven applicants, the fifth and final successful bidder was BT, although they will not use it for a mobile phone network but will use it as local 4G wi-fi.
The spectrum’s bids totalled just £2.3billion, much lower than the Treasury’s estimated £3.5billion and less than 20% of the £22.5billion raised in 2000 by the 3G auction.
Ed Richards, Ofcom chief executive, said: “This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country. We are confident that the UK will be among the most competitive markets in the world for 4G services. 4G coverage will extend far beyond that of existing 3G services, covering 98 per cent of the UK population indoors – and even more when outdoors – which is good news for parts of the country currently under-served by mobile broadband.”
Ofcom also revealed that it was “planning now to support the release of further spectrum for possible future ’5G’ mobile services”. It said that by 2030, demand for mobile data could be 80 times higher than it is in 2013. Future development of 5G would be needed to meet this demand and avoid a feared “capacity crunch”.
They continued, “More mobile spectrum is needed over the long term, together with new technologies to make mobile broadband more efficient.”
Guy Laurence, Vodafone UK Chief Executive said: “We’ve secured the low frequency mobile phone spectrum that will support the launch of our ultra-fast 4G service later this year. It will enable us to deliver services where people really want it, especially indoors. This is great news for our customers.”
Chief Executive of EE, Olaf Swantee said: “The acquisition of low and high frequency spectrum allows us to boost our superfast data services and coverage – indoors and outdoors, in cities and the countryside. “This result means that we are perfectly placed to meet future data capacity demands – further enhancing the superfast 4G services we already offer the UK’s consumers and businesses.”
Below is a detailed list of the winning bidders, how much they paid and the Spectrum they purchased:
Vodafone Ltd paid £790m for 2 x 10 MHz of 800 MHz, 2 x 20 MHz of 2.6 GHz and 1 x 25 MHz of 2.6 GHz (unpaired)
Everything Everywhere Ltd (EE) paid £588m for 2 x 5 MHz of 800 MHz and 2 x 35 MHz of 2.6 GHz
Telefónica UK Ltd (O2) paid £550m for 2 x 10 MHz of 800 MHz (coverage obligation lot)
Hutchison 3G UK Ltd (3) paid £225m for 2 x 5 MHz of 800 MHz
Niche Spectrum Ventures Ltd (BT) paid £186m for 2 x 15 MHz of 2.6 GHz and 1 x 20 MHz of 2.6 GHz (unpaired)
Vodafone, O2 EE and 3 have all won spectrum in the low frequency 800MHz band. Ofcom, who wanted to make sure four networks emerged from the auction, gave special protection to Hutchison 3G (3), allowing them to pay the reserve price of £225m.
The winning bidders have until Thursday 21 January to pay for their spectrum. 4G mobile services are anticipated to launch in the summer of 2013.
Although the main piece of the auction has finished, the method to decide where in the 800 MHz and 2.6 GHz bands each winning bidder’s new spectrum will be located is still to be resolved. This will take place shortly.