Ofcom delays 4G spectrum auction

The much-anticipated 4G spectrum auction, designed to boost mobile broadband in the UK, has been delayed.

Ofcom was expected to have delivered the terms of the auction this month, but now the document will not appear until November, according to the Guardian.

This delay will push the actual auction into the second quarter of 2012 at the earliest. It was supposed to take place in the first quarter.

Ofcom's plans have been hit by industry squabbling over the 4G auction, with providers claiming competitors are getting preferential treatment.

What we think...

As we've already seen with the rollout of fibre in this country, telecoms firms are happy to bicker with one another over service provision.

For the end user, the infighting will only delay access to better services. If the Government is serious about meeting its aim of making the UK the best connected nation in Europe by 2015, it may have to intervene to expedite progress.

Tom Brewster, Senior Staff Writer

Both O2 and Vodafone have raised concerns about the auction, suggesting it favoured other providers Everything Everywhere and 3 in particular.

"Ofcom has been very explicit in its aim to begin the 4G auction as soon as is practicable and this remains our objective," an Ofcom spokesperson said.

"However, this is a complex area, involving a large number of technical and competition issues that we need to consider and resolve before finalising proposals. For example, a very high proportion of households in the UK rely on Digital Terrestrial TV - Freeview - which needs to be relocated before 4G can be rolled out. This kind of complex problem needs to be properly addressed before we award the spectrum"

Mobile operator 3 has raised concerns about the delay. It would be hit hardest by Ofcom's action as other operators have spare spectrum which they can allocate thanks to a decision in January allowing them to re-use 2G spectrum for data services.

"There is a growing realisation of the role mobile can play in meeting the Government's universal broadband commitment by 2015," said David Dyson, chief executive of 3.

"Any significant delay risks impacting this and will further weaken competition to the detriment of UK consumers. Refarming 2G spectrum without any of the reallocation seen across Europe created an incentive for those gifted spectrum to delay the auction. Ofcom and the Government need to ensure their plans are not undone by narrow self interest."

Yet O2 believes it is others who will get preferential treatment from the auction, claiming in June Ofcom's auction proposals were illegal under EU law as they provided "state aid."

When 800MHz goes up for auction next year, rivals will be at an advantage for buying up that particular spectrum as Ofcom has chosen to lump 800MHz and 900MHz together in its sub-1GHz auction, O2 said.

As O2 and Vodafone already own 900MHz spectrum, other providers could get be pandered to when it comes to buying 800MHz, possibly at knock-down prices, according to O2.

"The proposed floors, and the argument that Vodafone and ourselves already have enough sub-1GHz spectrum, are based on the mistaken belief that 800 MHz and 900 MHz are directly comparable spectrums," O2 said.

The auction will also see 2.6GHz spectrum sold off.

Ofcom said any rollout of 4G services would not actually be possible until 2013, regardless of when the auction was held.

"We note that because these technical issues need to be satisfactorily resolved before new networks can be built, it will not be possible for mobile operators to start rolling-out 4G networks until during the course of 2013 at the earliest regardless of when the auction itself actually takes place," the spokesperson added.