Several media sources yesterday suggested the auction would be delayed until 2013 as the regulator has a range of technical and legal issues to address. Ofcom, however, has moved to state that, while there are numerous factors to still be resolved, it fully anticipates the auction to be held in the first part of 2012.
When the regulator first published plans for the auction in March, it had set a date for Q1 2012 but later went on to state this was an “ambitious” target. Final plans for the auction are expected to be released in November this year.
There has been significant frustration in the UK telecoms market regarding this auction, with legal disputes between mobile operators causing a major delay in the deployment of LTE technology. Another delay, as reported yesterday, would mean the UK falls further behind countries such as the US, Japan and Germany, which have already allocated spectrum and began its deployment.
Ofcom has had the added requirements to structure its 4G auction in the view of protecting 3, the UK’s smallest mobile operator which has less capacity than the other operators and to also promote competition between the larger players.
Operators in the UK have voiced reservations regarding Ofcom provisions for this spectrum, including claims released by O2 that Ofcom is providing 3, and the newly formed Everything Everywhere, with “illegal state aid”. 3’s CEO David Dyson told the Financial Times yesterday there was a risk the auction will be delayed if O2 took Ofcom to court.
The complexity of the auction and potential for delay means a lot of spectrum could be evenly dispersed between operators, and market watchers are predicting the amount raised from the 4G auction will be significantly lower than the £22.5 billion raised from 3G allocation in 2000.
According to today’s media reports, Ofcom is claiming a major issue with the spectrum largely revolves around the switchover from digital terrestrial TV, which a high proportion of the UK population has access to, and needs to be relocated before 4G spectrum is rolled out.
