Ofcom reveals bidders for UK LTE auction
Seven firms will participate in sale of 2.6GHz and 800MHz spectrum from January, including BT unit and PCCW
Published: 21 December, 2012
UK regulator Ofcom has revealed the line-up of bidders which will take part in the long awaited LTE spectrum auction starting next month, with no fewer than seven firms planning to compete for 2.6GHz and/or 800MHz frequencies.
As well as the four existing cellcos - EE, Telefonica, Vodafone and Hutchison 3 - other contenders will be a BT subsidiary known as Niche Spectrum Ventures; HKT, a unit of Hong Kong operator PCCW; and MLL Telecom, a UK-based network supplier. A combined 250MHz of spectrum will be on offer, to add to the 333MHz in use for mobile services today, making this the "largest ever sale of mobile airwaves in the UK", as Ofcom put it. The agency has put a £1.3bn reserve price on the spectrum, though the government has a target of gaining at least £3.5bn for the Treasury, prospects of which will be boosted by the relatively large number of bidders.
It is highly likely that the four mobile operators will get the 800MHz airwaves, which will be perceived to have the highest value because they support rapid coverage at affordable cost. BT will reportedly not bid for this spectrum and the same is likely to be true of MLL, whose existing services are in higher bands and which would lack the deep pockets to take on the big firms in a race for 800MHz. PCCW participated in an earlier UK auction, of 3.4GHz TDD spectrum, putting this into the UK Broadband initiative, which recently launched TD-LTE in central London.
Bidding will start in January 2013 and is likely to take place over "a number of weeks" before the final result is known. Roll-out will start in the spring and the government has committed to accelerate the transition of incumbents out of the 800MHz band, so that companies can start building networks about five months earlier than originally expected. That was one concession made to end the opposition of Vodafone and O2 to Ofcom allowing EE to deploy LTE this year by refarming its 1.8GHz GSM spectrum - an option denied to its two main rivals, which have their 2G networks in 900MHz.
O2 is already gearing up for LTE, even before it knows exactly which spectrum it will acquire. It has chosen Nokia Siemens to provide LTE equipment for services in London and the south east of England, following extensive trials. O2 will use the supplier's FlexiRAN system to upgrade 2G and 3G networks and support multiple connections. NSN will provide its Liquid Radio solution based on the Flexi Multiradio 10 Base Station, plus the NetAct network management system. The agreement also includes network implementation and care services across 50% of O2's RAN including London and the south east, and provisions for network sharing.