UK 4G winners announced, Vodafone goes big, government falls short on cash hopes

Ofcom has announced the winners of its 4G auction in the UK, with Vodafone taking the biggest slice of the pie, but the government falling short of its expected cash haul for the spectrum.

The government has raised £2.34 billion in auctioning off the new spectrum, considerably less than the £3.5 billion it had estimated in the recent Budget - and which, according to reports, it has already spent. 

Of the winners, Vodafone has paid £790 million to secure the biggest section of 2.6 Ghz coverage - something likely to give it the upper hand in urban areas. 

In total the auction brought in only 10 per cent of the £22.5 billion raised by the 3G sell-off in 2000. Other winners include EE, Hutchison 3G (Three), the BT Group and Telefonica (O2).

Before you wonder if that means that BT will move into the mobile operator space, don't - it won't.

“We are pleased to have secured this spectrum. We have said that we do not intend to build a national mobile network. Instead, this spectrum will complement our existing strategy of delivering a range of services using fixed and wireless broadband,"  Ian Livingston, BT chief executive, said in a statement. 

"We want our customers to enjoy the best possible connections wherever they are and this spectrum, together with our investment in fibre broadband, will help us achieve that.”

Almost the whole UK population will be able to receive 4G mobile services by the end of 2017 at the latest, says Ofcom.

A total of 250 MHz of spectrum was auctioned in two separate bands – 800 MHz and 2.6 GHz. This is equivalent to two-thirds of the radio frequencies currently used by wireless devices such as tablets, smartphones and laptops.

Within the news today is the confirmation that O2 will be obliged to provide a mobile broadband service for indoor reception to at least 98 per cent of the UK population (expected to cover at least 99 per cent when outdoors) and at least 95 per cent of the population of each of the UK nations – England, Northern Ireland, Scotland and Wales – by the end of 2017 at the latest.

The lower-frequency 800 MHz band is part of the "digital dividend" freed up when analogue terrestrial TV was switched off, and is ideal for widespread mobile coverage. The higher-frequency 2.6 GHz band is ideal for delivering the capacity needed for faster speeds. The availability of the two will allow 4G networks to achieve widespread coverage as well as to offer capacity to cope with significant demand in urban centres.

While the main part of the auction has concluded, there is a final stage in the process to determine where in the 800 MHz and 2.6 GHz bands each winning bidder’s new spectrum will be located. Bidding in this final stage – called the "assignment stage" – will take place shortly.