The announcement will likely leave UK consumers disappointed, with the country already lagging behind most of western Europe and the US in the roll-out of 4G services.
Mobile operators are expected to start rolling out 4G networks from the middle of 2013 and will start offering services later in the year.
Matthew Howett, practice leader of Ovum’s regulatory telecoms team, said that the disputes that have so far hindered the auction’s progress are likely to continue.
“Unless there are some material changes to the current proposals, such as Hutchison 3G acquiring spectrum from Everything Everywhere and the subsequent removal of minimum spectrum portfolios, litigation seems almost inevitable. With no obvious way out of the deadlock, any legal challenge could send everyone back to the drawing board.”
One of the main reasons for the 4G auction’s delays has been Ofcom’s requirement that four credible national wholesalers needed to be present in the country, which is dominated by Telefónica’s O2, Vodafone and France Telecom/Deutsche Telekom joint venture Everything Everywhere. A small amount of spectrum will be reserved for this purpose, paving the way for a bid from Hutchison 3G or a new entrant.
During the auction the equivalent of three quarters of the mobile spectrum in use today will be made available, 80% more than released in the UK’s 3G auction in 2000. At least two spectrum bands will be offered in the auction process, 800MHz and 2.6GHz, providing up to 250MHz of additional spectrum compared to the 333MHz in use today.
The 800MHz spectrum bands will be auctioned in a series of lots, one of which will carry an obligation to provide indoor mobile broadband services to 98% of the UK population by the end of 2017.
Ofcom said that it expects this obligation on one operator to force the other operators to extend their coverage in response.
Lee Myall, UK director of pan-European carrier Interoute, stressed the importance of Wifi hotspots when services launch. “The industry as a whole needs to be taking responsibility for offloading data wherever it is possible. Using Wifi hotspots will not only take the pressure off 4G, but keep consumer phone bills down too,” said Myall.
The auction process is expected to begin at the end of this year following a statutory consultation closing on September 12.
