Ofcom delays 4G auction again

Ofcom has yet again delayed the 4G spectrum auction as it wants to carry out additional consultation on the process.

The regulator had already pushed the auction back by a quarter but now the sell-off will not happen until the end of 2012 at the earliest.

"We plan to publish a further consultation document around the end of this year. We will then give stakeholders an appropriate period of time in which to comment on our refined analysis and respond to our revised proposals - likely to be at least eight weeks," an Ofcom statement read.

"Our aim will then be to make our decision and publish a statement in the summer of 2012. The auction itself would then follow a few months later - perhaps starting in Q4 2012."

Ofcom claimed it was unlikely the actual rollout of 4G to consumers would be affected by the delay, as the 800MHz and 2.6GHz spectrum bands will not be available until 2013.

Industry bickering

Ofcom's decision has inspired mixed reactions from providers, who all have their own agenda when it comes to the auction.

We believe that the 4G auctions should be held as soon as possible so the benefits of faster data speeds reach consumers quickly.

Much of the in-industry bickering has focused on Ofcom's decision to use "spectrum floors," designed to guarantee a minimum of four providers receive at least a minimum amount of spectrum.

In June, O2 said the floors favoured others as Ofcom had lumped 800MHz and 900MHz together. As O2 already has 900MHz spectrum, it would not be guaranteed any 800MHz spectrum as others might, the provider claimed.

O2 and Vodafone, which claimed in June the auction favoured other providers including 3 and Everything Everywhere, welcomed Ofcom's cautious approach.

"O2 wants a fair and competitive auction process that achieves a good outcome for consumers and taxpayers. The purpose of the Ofcom consultation process currently taking place is to achieve these objectives," an O2 spokesperson said.

"The most important thing is that Ofcom gets it right. The key objective of the 4G auction should be to ensure that the operators are able to exploit the full potential of the spectrum, and deliver the vast range of services that 4G will enable."

Everything Everywhere, however, said the auctions should take place as soon as possible.

"We believe that the 4G auctions should be held as soon as possible so the benefits of faster data speeds reach consumers quickly. We understand though from Ofcom that the complexity of the issues means that further consultation is necessary," an Everything Everywhere spokesperson said.

"We are concerned that the 4G spectrum bands are now not expected to be cleared nationally until 2013, as outlined in Ofcom's statement. We stand by our recommendation that to ensure fairness, the auction is designed so that all operators not just Vodafone and O2 get access to sufficient low frequency spectrum. The sooner this is resolved, the better for all of our customers."

The business cost

If the auction causes delays to the actual rollout of 4G, it will have significant financial implications for the UK economy.

The UK could enjoy more than 37 million extra business hours a year if 4G services were rolled out today, a report from the Open Digital Policy group claimed last week. Without this extra time, the country's businesses are losing 732 million a year, the research suggested.

Under current plans, it will take until 2017 for 95 per cent of the country to be able to access 4G.

The UK is far behind other nations, such as the US, which have already rolled out 4G services to their citizens and businesses.