Britain's 4G auction raises 2.3 bn pound, sum less than hoped

Feb 21 2013, 09:12 IST
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Ofcom now expects 4G services from the operators to be rolled out within the next six months. (Reuters) Ofcom now expects 4G services from the operators to be rolled out within the next six months. (Reuters)
SummaryOfcom now expects 4G services from the operators to be rolled out within the next six months.

Britain's 4G auction has raised 2.3 billion pound for the government, with five major telecom companies bagging licences but the biggest sale of British airwaves failed to meet Chancellor George Osborne's target of 3.5 billion pound. "After more than 50 rounds of bidding, Everything Everywhere Limited, Hutchison 3G UK Limited, Niche Spectrum Ventures Limited (a subsidiary of BT Group plc), Telefonica UK Ltd and Vodafone Limited have all won spectrum. This is suitable for rolling out new superfast mobile broadband services to consumers and to small and large businesses across the UK," UK telecom watchdog Ofcom said in a statement.

The independent regulator and competition authority for the UK's communications industry added that the total bid amount added up to 2.341 billion pound or USD 3.615 billion.

Ofcom now expects 4G services from the operators to be rolled out within the next six months.

The UK government was relying on this auction to help curb national borrowing this financial year based on the 4G proceeds.

As the payments failed to meet the 3.5 billion pound estimate, the government will hope to make up the shortfall with a rise in rental fees for spectrum networks already

owned.

A total of 250MHz of spectrum was up for grabs in the 800MHz and 2.6GHz bands. The former was freed when analogue television transmissions were switched off here last year, while the latter is ideal for delivering the capacity necessary for faster speeds.

It is hoped the combination of the two will allow networks to deal with demand in urban areas and provide widespread coverage.

Vodafone won the most spectrum in the auction, securing 20MHz of 800MHz bandwidth and 65 MHz of 2.6GHz, and will have to pay 790.8 million pound.

Britain had launched 4G services in October last year to catch up with the global roll-out. Everything Everywhere, a merger of the country¿s Orange and T-Mobile networks, went live with the service ahead of the full auction result. It has now won 10MHz of 800MHz bandwidth and 70 MHz of 2.6GHz to complement its existing network at a cost of 588.9 million pound.

The final stage in the process is called the "assignment stage", in which winners will bid to see where in the 800MHz and 2.6GHz bands their spectrum will be located. The companies then have to settle their bills with Ofcom, who will then issue licenses for the airwaves.

Despite not raising as much money as had been

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