Vodafone, O2 and Three win 4G, but auction falls £1.2bn short

Major UK networks, including BT, have all won 4G spectrum. But the auction didn't generate as much cash as hoped.

O2, Vodafone and Three have all won slices of 4G spectrum, meaning networks other than EE can begin rolling out speedy data services this year.

This morning Ofcom confirmed that after more than 50 rounds of bidding, every major UK network has walked away from the now-concluded 4G auction with barrelfuls of bandwidth, including spectrum that was freed up in the TV digital switchover.

Vodafone was the biggest bidder, splashing out nearly £800m for a pair of 10MHz slices in the 800MHz band, as well as other bits of bandwidth that will enable it to offer faster mobile data to customers. BT was the lowest bidder, but managed to nab some bandwidth.

Although EE is already running a 4G network using 1,800MHz bandwidth it already owned, the operator -- which owns Orange and T-Mobile -- paid just shy of £600m to pick up even more spectrum.

It's hoped that more networks offering 4G will cause a price war that results in cheaper tariffs for phone buyers. Three has fired the first shot already, promising that it will roll its 4G network into existing coverage, without raising prices.

Meagre cash for Britain

Ofcom boss Ed Richards called the auction's result a "positive outcome for competition in the UK", but the amount of cash generated by bidding networks was substantially lower than expected, which is bad news for the UK.

The total cash generated was £2.34bn. That's nothing to sneeze at, but is well short of the £3.5bn the auction was expected to raise. Moreover, Chancellor George Osborne had already factored the expected sum into the nation's budget this year, making it appear that the UK's deficit would fall in 2013. That leaves the treasury £1.2bn short of its expected target. Take it away, Picard.

Are you excited about 4G? Will you invest in a 4G contract? Let me know in the comments, or on our Facebook wall.

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About the author

Luke Westaway is a senior editor at CNET and writer/ presenter of Adventures in Tech, a thrilling gadget show produced in our London office. Luke's focus is on keeping you in the loop with a mix of video, features, expert opinion and analysis.

 

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