4G spectrum auction in UK: Bidding doesn’t start until 2013

4g LTEThe UK telecoms regulator, Ofcom, has finally announced details of the 4G bandwidth auction in the UK. The process will begin this year but the first bids won’t be submitted until early 2013. That means 4G LTE networks are not going to be up and running for consumers until late 2013.

That timetable puts the UK well behind the leading markets. The fourth generation of bandwidth for mobile devices is already widely available in the US and it provides consumers with much faster download speeds, up to ten times faster than 3G. Uptake of 4G is being driven by young consumers and the expansion of 4G networks and roll out of 4G devices is picking up pace.

The upcoming 4G auction in the UK “will offer the equivalent of three quarters of the mobile spectrum in use today – some 80% more than released in the 3G auction which took place in 2000.”

That makes it the biggest auction of spectrum for mobile services ever in the UK and it will generate some tough competition. The big three carriers set to duke it out are Vodafone, Everything Everywhere (Orange and T-Mobile merged), and Telefonica (owners of O2). Ofcom is keen to spark some competition so a minimum amount of spectrum is set to be reserved for a fourth market entrant. Who that will be remains to be seen, but the idea is that it will benefit consumers with greater competition leading to lower prices.

It is estimated that these plans will bring mobile broadband to 98 percent of the UK population. The auction will also generate a lot of cash. The 3G auction raised £22.5 billion (around $35 billion) and that was back in 2000. The 4G auction has a reserve price of £1.4 billion but is widely expected to raise a lot more.

Many consumers in the UK already have devices capable of running on 4G networks but the earliest they’ll be able to take advantage is the middle of 2013. With many countries — including the US, Germany, Norway, and Sweden — already enjoying 4G speeds, it seems like UK consumers are being asked to wait a very long time for a simple auction.