Ofcom announces 4G bidders - BT included

Communications regulator Ofcom has announced the bidders for the long awaited 4G spectrum auction, which it has dubbed the largest ever sale of mobile airwaves in the UK, and it includes telecoms giant BT.

BT had first indicated to Computing that it could bid for 4G spectrum back in July, and more recently it said that it wouldn't be adding anything further but that we should keep an eye out at what comes out of the Ofcom application process.

It now comes to light that a new subsidiary of BT, Niche Spectrum Ventures has applied - and qualified - for the auction.

The other organisations that have qualified to bid in the auction, which will start in January 2013 are: Everything Everywhere (EE), HKT (a subsidiary of mobile operator PCCW ), Three, MLL Telecom, Vodafone and O2.

The application deadline was on 10 December to bid for the spectrum and while the likes of EE, Three, Vodafone and O2 were always likely bidders, it was always going to be of interest which other operators would join them in the process.But Ovum analyst Matthew Howett believes a new entrant, including BT will find it difficult to gain anything from the auction.

"The way the auction has been structured makes it hard for a new entrant to walk away with any meaningful amount of spectrum. There is a block of spectrum available at 2.6GHz, which could attract a new entrant, but if they did win that spectrum they would only be able to launch a service on a regional basis for instance as there wouldn't be enough spectrum for a nationwide service, unless it signed a national roaming deal with another operator," Howett said.

Bidders will be competing for spectrum in two separate bands - 800MHz and 2.6GHz, the lower frequency 800MHz band was freed up when analogue terrestrial TV was switched off, while the 2.6GHz band is best for delivering faster speeds.

"The 4G auction will be a competitive process that will dictate the shape of the UK mobile phone market for the next decade and beyond," Ofcom chief executive Ed Richard said.

"New 4G services will stimulate investment, growth and innovation in the UK and deliver significant benefits to consumers in terms of better, faster and more reliable mobile broadband connections," he added.

The bidding process is to start in January and is expected to take a number of weeks.

Between the months of February and March, bidders are to be informed of what they have won and its cost, with licence fees paid and licences granted.

"That should get wrapped up within the first quarter of the year, and then towards the second quarter of 2013 new 4G services will be launched. We expect new 4G services to go live from a range of providers in May or June," an Ofcom spokesman told Computing.