The UK’s 4G auction has been pushed back to 4Q 2012 at the earliest to enable local regulator Ofcom to launch a further consultation on its proposed rules. Ofcom had been set to host the auction in the first-half of 2012 – after originally planning…
The UK’s 4G auction has been pushed back to 4Q 2012 at the earliest to enable local regulator Ofcom to launch a further consultation on its proposed rules.
Ofcom had been set to host the auction in the first-half of 2012 – after originally planning to hold it in Q1 of next year.
But after reviewing “substantial and strongly argued” responses to its original consultation over the summer, Ofcom said it feels a further round of consultation is required to refine its analysis.
“We plan to publish a further consultation document around the end of this year,” stated the regulator.
“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. 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.”
However, the regulator insisted that, in any case, the country’s 800MHz and 2.6GHz spectrum bands will not be available for use until 2013, and will not be available nationwide until late in the same year. According to Ofcom, this means its consultation delay “is unlikely to have a material impact on the timeline for the availability of new services to consumers”.
In March this year, Ofcom proposed a series of bidding floors and caps for the auction as part of efforts to ensure a minimum 4-player wholesale market.
The suggested rules state that at least four parties must each hold sufficient spectrum to be credible national wholesalers. Rather than re-auctioning the frequencies if these conditions are not met, Ofcom intends to examine previous bids to determine how to allocate the spectrum.
Safeguard caps are also set to be imposed on sub 1GHz and overall spectrum holdings to ensure no one operator holds too much spectrum. In addition, the regulator intends to impose one 800 MHz licence with a coverage obligation, requiring the holder to guarantee mobile broadband for 95% of the UK population by end of 2017. Ofcom is also looking at reserving some 2.6 GHz spectrum for sub-national network operators to be used on a shared low-power basis.
A spokeswoman for mobile operator Everything Everywhere cautioned that the 4G auction should be held as soon as possible so the benefits of faster speeds can reach consumers quickly.
“We understand though from Ofcom that the complexity of the issues means that further consultation is necessary,” she 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.”
Mobile operator 3, which is owned by Hong-Kong-based conglomerate Hutchinson Whampoa, echoed EE’s sentiment for consumers, but added that the delay will also extend the “massive competitive and commercial imbalance” caused by Ofcom’s decision earlier this year to allow operators to use their 2G frequencies for 3G services.
“Operators that currently rent low frequency spectrum for a fraction of its fair value will continue to get a free ride at the expense of UK taxpayers as prices for rented low-frequency spectrum will only be re-balanced at the time of the auction,” he said.
Meanwhile, Guy Laurence, chief executive of mobile operator Vodafone, downplayed 3’s claims of an anti-competitive market by pointing to its iPhone subscription successes.
O2 was unable to comment before the press deadline.
