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Ofcom have launched their plans for the largest ever auction of radio frequencies for mobile services, 80% larger than the 3G auction of 2000.
In order to promote competition, Ofcom has decided that UK consumers will benefit from better services at lower prices if there are at least four "credible national wholesalers of 4G mobile services”. As such, Ofcom has decided to reserve some of the spectrum for a fourth operator – likely to be Hutchison 3G who might otherwise be outbid by the larger operators 02, Vodaphone & Everything Everywhere who own the Orange and T-mobile brands.
The 4G auction will offer at least two spectrum bands – 800 MHz and 2.6 GHz. The 800 MHz band is part of their "digital divedend” project aligning our use of frequencies with European allocations and moving some digital terestrial television frequencies. The higher frequency bands are said to be ideal for delivering the capacity needed to deliver faster speeds while the lower 800 MHz bands are well suited to provide high levels of coverage.
The spectrum bands will be auctioned as a series of lots. One of the 800 MHz bands will be offered with a lower minimum bid but carry an obligation to supply a mobile broadband service to allow indoor reception to at least 98% of the UK population.
Ofcom expect that forcing one operator to offer this level of coverage will drive the other operators to respond and extend their own coverage.
Ofcom hope to hold the auction as soon as possible with the auction process expected to start before the end of 2012 with the bidding phase in early 2013 leading to mobile operators offering 4G services later in 2013.
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