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BT Enters Auction Race For 4G Spectrum

Companies bidding on 4G spectrum include BT, and a couple of other surprises

On by Tom Jowitt 0

BT is a surprise entry in Ofcom’s auction for 4G spectrum in the UK. Alongside existing mobile operators, the names include other surprises: MLL Telecom and PCCW.

The Ofcom auction, expected to raise some £3.5 billion, was launched last week, and will start in earnest in January, It comes alongside other spectrum suitable for fast 4G mobile broadband services, which will be released by the Ministry of Defence (MoD).

The usual 4G spectrum suspects?

The list released by Ofcom revealed the names of the companies that are bidding in the forthcoming 4G mobile spectrum auction. The bidders include:

  • Everything Everywhere Limited (UK): The combined entity following the merger of the mobile operators Orange UK and T-Mobile UK.
  • Vodafone Limited: The national mobile operator.
  • Telefónica UK Limited: The Spanish-owned telecoms giant that now controls the mobile operator O2.
  • Hutchison 3G UK Limited: The owner of the mobile operator Three UK. The operator is understood to be interested in all spectrum, and of course has already acquired 1800MHz spectrum after Everything Everywhere was ordered to divest it.

However the Ofcom list also revealed some lesser known and some more surprising entities seeking 4G spectrum in the UK.

  • HKT (UK) Company Limited (a subsidiary of PCCW Limited).

Owner of wireless specialist UK Broadband, which launched the first 4G network in the UK in February this year when it deployed an LTE network in the London Borough of Southwark. Its 4G network also now includes Reading, Swindon and Scunthorpe.

  • Niche Spectrum Ventures Limited (a subsidiary of BT Group plc):

“We can confirm we are a 4G spectrum bidder,” a BT spokeswoman verbally confirmed to TechweekEurope, but would not expand on the carrier’s reasons for doing so.

The fact that BT is bidding is interesting, considering it has previously stated it has no plans to become a nationwide mobile operator. BT of course famously sold off its mobile operator, BT Cellnet (later known as O2) a decade earlier. TechweekEurope understands that BT may be seeking small amounts of spectrum to bolster its Wi-Fi services.

“We have been going for 20 years now,” explained Karl Edwards, Chief Commercial Officer at MLL Telecom. “We started out as a backhaul specialist building networks for Vodafone and others, and then we diversified into data networking, but still retained our radio pedigree.”

So why is MLL seeking to add to its existing spectrum capacity?

“With our current spectrum allocation, we already have 32 and 42GHz spectrum, which is used as mobile backhaul for various carriers,” said Edwards. “However we are not looking to build a go-to-market competitive 4G solution for consumers. We are looking to offer carrier grade solutions for our current customers.”

Edwards feels that the upcoming auction will not be just about who has the biggest wallet, considering the vast overspend by mobile operators on the 3G licences a decade ago.

“All carriers are nervous about 4G licence expenditure,” said Edwards. “We believe in a converged solution, not a purely financial one. It will be a strongly contested environment, but will not be adjudicated on financial performance alone.”

Up For Grabs

So the 4G bidders have now been publicly revealed, and they will compete against one another for spectrum in two separate bands, namely 800 MHz and 2.6 GHz.

The lower frequency 800 MHz band is part of the ‘digital dividend’ freed up when analogue terrestrial TV was switched off. This band is ideal for widespread mobile coverage, whereas the higher frequency 2.6 GHz band is ideal for delivering the capacity needed to deliver faster speeds.

These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today,” said Ofcom. “Both bands are being packaged into smaller lots for the auction.”

“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,” said Ed Richards, Ofcom’s chief executive.

“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,” said Richards.

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Tom Jowitt
Author: Tom Jowitt
Freelance TechWeek Reporter
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