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20 February 2013
| Kavit Majithia
The UK airwave auction has fallen well below early estimates after only raising £2.3 billion with five bidders successfully acquiring spectrum.
Analysts had anticipated as much
as £3.5 billion would be raised from the auction, and
this sum had already reportedly been factored into government
accounts for this year.
The auction was fiercely contested, despite only raising
a 10th of the £22.5 billion raised during the 3G
auction in 2000.
As the auction finally draws towards a close, the UK will
finally see the universal launch of 4G services. EE had been
operating 4G since late last year after it was allowed to reuse
its existing spectrum.
Vodafone has spent the largest sum, at £791 million, with
EE footing a bill of £589 million. O2, which has an
obligation to cover 99% of the population will spend £550
million and 3 will pay £225 million.
BT, surprisingly, has spent £186 million on frequencies
addressing the higher end, and will look to boost mobile
broadband services and improve its Wifi offering. Its
investment signals the company’s move back into
There have been long delays for the UK 4G auction after it was
originally scheduled for 2008.
Operators have been divided and regulatory issues meant the
auction has been put off, putting the UK significantly behind
the US, Asia and other parts of Europe.
The UK government sees 4G as a likely catalyst for economic and
technological improvement in the country, and a recent report
by Ofcom indicated UK customers are likely to benefit from the
technology by £20 billion over the next ten years.
""This is a positive outcome for competition in the UK, which
will lead to faster and more widespread mobile broadband, and
substantial benefits for consumers and businesses across the
country. We are confident that the UK will be among the most
competitive markets in the world for 4G services," said Ed
Richards, chief executive of Ofcom.