“Who’ll start us off with £1.3bn? Any bidders?”
We’re just waiting for the hammer to fall, as Queen once sang. And indeed, so is the entire mobile industry, anxious as it is to see how the UK’s 4G spectrum auction turns out. Bidding started yesterday, under the careful scrutiny of regulator Ofcom. However, a media event it is not, as there will be no public posting of bids until after the auction has concluded.
Not very new media, is it? In this age of social media, surely Ofcom could have arranged for the registered participants to submit their bids via twitter, with a suitable hashtag so that the rest of the world could share in the excitement. Or perhaps be uber cool and hold the whole shebang via a Google+ Hangout session? That would surely get Joe Public excited in 4G and more willing to fork out higher subscription costs for the supposed benefits that they will receive with an LTE device.
Apparently, the reason for the secrecy, says Ofcom, is “to reduce any potential risk of strategic bidding which could distort the outcome of the auction”. How boring. Still, with several billion pounds at stake (not to mention the hopes of the entire UK economy, with the Chancellor of the Exchequer betting his shirt on a bumper final total), this is a serious business.
It will likely be a couple of weeks before the outcome is known. In the meantime, the seven companies who are playing this high-stakes games are, in alphabetical order:
Everything Everywhere (EE)
HKT (UK) (a subsidiary of PCCW)
Hutchison 3G UK
Niche Spectrum Ventures (a subsidiary of BT Group)
Ed Richards, CEO of Ofcom, said in a statement that the auction would “release the essential raw material for the next wave of mobile digital services”, and that it will “change the way we consume digital media in both our personal and working lives and deliver significant benefits to millions of consumers and businesses across the country”.
Strong stuff. And let’s hope he’s right. Early third-party evidence from EE’s pre-emptive 4G launch suggests that consumers are exactly rushing to sign up – despite a rather clever, and no hideously expensive, advertising campaign with Kevin Bacon. It would appear that a number of factors are at play: unknown and unproven benefits of 4G (to UK consumers, that is); very limited coverage; concerns over data caps; and a desire to wait until all operators can offer 4G and for this competition to encourage deals and incentives.
Ofcom will ensure that at least four different operators have sufficient spectrum to be credible national 4G wholesalers. It’s not just about raising cash, says the regulator. Bidders will be competing for 28 lots of spectrum in two separate bands – 800MHz and 2.6GHz. Once fees are paid by the winners, licences will be granted, enabling operators to start rolling out new networks. It is expected that services will be launched by a range of providers as soon as late spring or early summer.
Matthew Howett, telecoms regulatory analyst at Ovum, commented:
“We don’t expect any big surprises along the way with the existing four mobile network operators likely to emerge with a combination of high and low powered spectrum that will enable them to launch 4G LTE services later this year. BT and PCCW are likely to pick-up spectrum in the 2.6GHz band that will allow them to offer small scale, campus-wide type services alongside their other communications services – primarily to their enterprise clients.”