Watchdog reveals 4G spectrum auction details

Blighty’s  communications watchdog Ofcom has revealed some of the planning behind its largest-ever auction of mobile phone spectrum in 2012.

The big idea is to enabling high-speed internet connectivity around the UK while also guaranteeing competition, just before the world ends in December.

The language of the plan is remarkably similar to the last time there was a spectrum auction for 3G in 2000.

Then bidding got out of control with carriers paying £22 billion for the rights to the spectrum. This was so much cash that they could hardly afford to put out products for a while.

Again the talk is of how 4G will bring about huge bandwidth improvements. LTE is supposed to enable connections at speeds of up to 100Mbps, about 25 times faster than the average broadband connection.

Ofcom said that the spectrum  will be auctioned off in five chunks. Ofcom it will limit both the minimum and maximum amounts of spectrum that any bidder can win. This is designed to keep a balance of competition is maintained between the existing four mobile networks.

It does not look like potential new entrants will get a look in, or a leg up.

Blighty has been slow to roll out 4G LTE systems. It has even managed to fall behind the US where the Verizon network has this year introduced LTE connectivity.

While the set up for the auction seems to be similar to 2000, mobile companies are less likely to indulge in the same bidding frenzy. For a start they have less cash and many outfits are a little concerned about how expensive it will be to set up the 4G gear.

Ofcom chief executive, Ed Richards, that spectrum will be awarded in a way that secures the best use of the spectrum for the benefit of citizens and consumers in the UK.

The auction has been designed to encourage investment but also promotes competition and delivers wide coverage of services, he said.

If a company does not win enough of the spectrum to provide higher-quality data services, the auction will be re-run. There will also be “caps” on the low-frequency spectrum that can be won, and on the total amount of spectrum any bidder can win.