UK regulator Ofcom reportedly received at least five applications yesterday to take part in its auction of 4G frequencies next year.
Existing mobile operators EE, Vodafone, O2 and 3 are expected to have paid a £100,000 deposit for the chance to pick up…
UK regulator Ofcom reportedly received at least five applications yesterday to take part in its auction of 4G frequencies next year.
Existing mobile operators EE, Vodafone, O2 and 3 are expected to have paid a £100,000 deposit for the chance to pick up 800MHz and 2.6GHz spectrum. BT has previously expressed interest in acquiring 2.6GHz frequencies to bolster its wifi offering, although it is not thought to have aspirations of becoming a major mobile player.
All of the parties declined to comment.
Citing undisclosed sources, the Daily Telegraph reported that international players and private equity could also have registered to take part.
Brian Potterill, PwC’s director of telecoms strategy, was cited saying PE firms could create a secondary market for 4G frequencies once the auction is over.
But he told TelecomFinance that although this was theoretically possible, it was also very unlikely.
Prospective bidders require Ofcom’s approval to take part in the auction, and the regulator plans to announce successful registrations in the next few weeks. Although the new mobile licences would be immediately tradable, encouraging a secondary market appears to go against its publicly stated goal of releasing extra capacity to consumers as quickly as possible.
The auction itself has already faced years of delays, which has led to criticisms of the UK becoming a laggard in the 4G race, as other countries are already deploying 4G commercially.
Despite this, PE firms could be looking to take advantage of auction rules designed to make it easier for a new player to enter the mobile market. These rules would see a fourth bidder picking up 2.6GHz spectrum relatively cheaply at a minimum reserve price, but only if there was no fifth bidder in the process.
In October EE became the first and only operator so far in the UK to launch 4G commercially, because of the swathe of spectrum it gained from the Orange and T-Mobile merger that created it. As part of the conditions tied to this merger, EE has also sold a quarter of its 1800MHz spectrum to smaller rival 3, although it does not have to close this sale until October 2013.
Earlier this month George Osborne, the UK’s chancellor, said he anticipated raising £3.5bn from next year’s 4G sale, which he has already earmarked for spending plans to bolster the country’s economy.
