Ofcom spreads the 4G love

February 21, 2013

ofcom 4Gpurple2

The 4G auction is finally over and the results are in, and as expected there’s no surprises. Well apart from the surprise the Government got when it opened the envelopes and discovered this time the mobile operators had decided to bid low – very low compared to the £22.5 billion 3G bun fight.

The good news is that the operators aren’t now mortgaged to the gills like they were with 3G, which hopefully will be reflected in the tariffs they charge for their 4G services. To be honest what they’ve paid is peanuts, and if any of them use this as an excuse to up the charges for 4G then they’re taking the piss. The bad news is we can’t see a single one of them throwing away the possible “we have to recoup the auction cost” as an excuse to charge more. We will have to wait and see, but if we were a betting site – and believe me we are – then we’d bet on the charging more option.

So who were the winners and who were the losers?

Vodafone has walked away with the largest share of the cake; Having bid £791 million Vodafone punched above its weight – it’s 3rd biggest in customer numbers in the UK – and now has a bigger share of the 4G spectrum.

The newly named EE and the only network already using 4G is second – although first in customer numbers – with a £589 million bid, and in third place is O2 with £550 million. O2 also draw the public service short straw and have to extend 4G coverage to at least 98% of the UK population indoors, and ensure a signal to 95% of people in England, Northern Ireland, Scotland and Wales. Ouch!!

Tail enders in the 4G race are 3, who paid the reserve price of £225m after winning special protection from Ofcom, and BT which only intends to use the 4G spectrum it won for corporate users/

When the networks pay their bills on Thursday, EE will have more than a third of the total spectrum 36%, Vodafone will be on 23%, O2 will have 15%, and 3 will be a close fourth with 12%,. New entrant BT will be last with just 9%.

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