UK communications watchdog sets 4G auction for next year

The UK communications watchdog has set the stage for the introduction of next-generation of internet services on mobile phones, with operators to battle it out for licences, at an auction in 2012. 

Ofcom yesterday announced plans for the largest single spectrum auction which would allow provision of 4G services to UK customers. The telcos that would vie for the 4G pie are Everything Everywhere, O2, Vodafone and 3UK.

According to analysts the announcement was significant and everyone had been waiting for it for a while. They add that the outcome would shape the mobile landscape for years to come. 

The regulator said the auction would include safeguards and coverage conditions for promoting competition and to "significantly widen the coverage of mobile broadband" to 95 per cent of Britons.

The 3G auction at the height of the dot.com boom brought the government £22.5 billion, but many believe this time round, the spectrum auction would likely to raise only between £2 billion and £4 billion. Though Ofcom did not comment on the potential price it raised the minimum reserve, saying it would cover the costs of the auction and discourage frivolous bids.

Spectrum availability is of vital importance to operators as they seek to offer services related to mobile internet data with the growth in popularity of smartphones and tablet computers. According to Ed Richards, the chief executive of Ofcom, this was a hugely contested area with assets on offer that be of strategic importance for competition in the market for the next 20 years.