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Telecoms industry relieved by ‘cheap’ 4G auction prices

Derek du Preez | Feb. 21, 2013
Industry watchers, stakeholders and commentators have welcomed the news that Ofcom’s 4G spectrum auction brought in £1.2 billion less than what was anticipated by the government, although it is likely to be unwelcome news for the Treasury.

"Based on what has been disclosed so far by Ofcom it is difficult to see an obvious course for any of the existing mobile network operators to launch a challenge to the process or the results, which will hopefully mean that we will see 4G services from them by the Summer," he said.

"The amount raised will obviously be disappointing for the government, although probably represents a more reasonable assessment of the value of this spectrum on the market. The amount realised here is broadly in the same range as other recent 4G auctions in Europe (e.g. the French auction raised £747 million, while the German equivalent raised £3.5 billion), so should not come as a huge surprise."

However, Clark predicts that despite the drop down price, consumers can still expect to be charged somewhat of a premium for the newly rolled out 4G services.

"It is certainly good news for both the operators and their customers that we have not seen a return to the heights of the 3G auctions, although general pricing for 4G services is still likely to represent a rise based on equivalent 3G prices as operators seek to establish the premium nature of these new services and increase the size of the average revenue per user to pay for these new networks," said Clark.

All of the mobile operators have said that they are pleased with the result.

Vodafone UK chief executive Guy Laurence said: "We've secured the low frequency mobile phone spectrum that will support the launch of our ultra-fast 4G service later this year. It will enable us to deliver services where people really want it, especially indoors. This is great news for our customers. The next generation of mobile internet services will bring real benefits to both consumers and businesses."

O2 CEO Ronan Dunne said: "Today, Telefnica has made a significant investment in next-generation 4G technology for the UK. While 4G will indeed allow for faster data speeds and a more seamless mobile experience, it is our intention to go beyond what has already been offered in the market and give our customers a unique and exclusive range of digital experiences, marking a new generation for the mobile industry.

Olaf Swantee, Chief Executive of EE, said: "EE is extremely pleased with the outcome of the spectrum auction. The acquisition of low and high frequency spectrum allows us to boost our superfast data services and coverage - indoors and outdoors, in cities and the countryside. This result means that we are perfectly placed to meet future data capacity demands - further enhancing the superfast 4G services we already offer the UK's consumers and businesses."


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