4G mobile auction deadline unveiled by Ofcom

The 4G network promises to give customers superfast internet searches, downloads and video streaming without the need for a fixed line. Ofcom said the auction will be the UK’s biggest ever sale of mobile airwaves.

EE, the owner of T-Mobile and Orange, is currently the only mobile operator in the UK with enough spectrum to offer 4G capability.

Its three rivals, O2’s parent Telefonica, Vodafone and Three, are expected to be the frontrunners for additional frequencies as demand for mobile broadband grows.

EE was able to leapfrog rivals to launch ahead of the long-delayed auction, infuriating O2, Vodafone and Three.

Ofcom permitted EE to re-use some of its existing 2G and 3G spectrum – airwaves that carry mobile signals – to offer 4G services. The decision was a calculated move to kick-start 4G, and make the operators agree to a timetable for the spectrum auction and delivery of services after lengthy delays.

A spokesman for O2, which has 2,700 staff in Leeds, said the company is going through the details announced by Ofcom yesterday.

The group, headed up by chief executive Ronan Dunne, is keen to offer customers 4G as soon as possible.

“4G will open up a world of possibilities for our customers –improved internet experiences, quicker downloading, multiplayer gaming online and streaming live events and video,” said an O2 spokesman.

“We’ll be working as quickly as possible to launch our 4G network in 2013.”

Vodafone said it will offer all its customers 4G when it launches next spring. Customers will receive a 70 per cent reduction in remaining contract charges when they make the switch.

Bidders have to submit a £100,000 deposit to register for the auction of the new spectrum, which can be used by smartphones and tablets to provide 4G services at speeds similar to home broadband.

Ofcom said it expects mobile operators to be able to provide fourth-generation services from May next year.

Bidders will be able to submit their applications with an initial deposit from December 11, with bidding beginning in January and licences granted in February and March.

Ofcom expects to raise a minimum of £1.3bn from the auction and analysts said it could raise up to £5bn. The final outcome will be much less than the £22.5bn raised from selling 3G frequencies during the dotcom boom in 2000.

Ofcom chief executive Ed Richards said: “Today marks an important shift from preparation to the delivery of the auction, which will see widespread 4G mobile services from a range of providers.

“The entire industry is now focused on the auction itself, with a shared goal of delivering new and improved mobile services for consumers.”

Ofcom said download speeds on initial 4G networks could be around five to seven times faster than those provided by 3G networks, paving the way for a superfast broadband era where consumers can watch video and use the internet on the move.

This means a music album which takes 20 minutes to download on a 3G phone will take just over three minutes on 4G. This is based on existing 3G speeds being 1Mbit/s on average and 4G speed being 6Mbit/s.

EE will offer 4G in 16 cities, including Leeds,Sheffield and Hull, by the end of this year.

Timetable for superfast future

December 11: The application day. 
Prospective bidders submit their applications with an initial deposit.

December: Qualification stage. Applications are reviewed to determine who can go on to bid in the auction.

January: The principal stage. Bidding begins. This could take a number of weeks. Bids will be placed online over secure internet connections.

February/March: The assignment stage. Bidders informed what they have won and its cost.

February/March: The grant stage. Licence fees are paid and licences granted.

May/June: New 4G services launched. New 4G services expected to go live.