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The biggest auction of space on the British airwaves is to be held towards the end of 2012, when telecoms companies will bid to acquire the spectrum they need to enable a mass uptake in the use of bandwidth-hungry smartphones and tablets.
At least 98 per cent of the UK population would have access to mobile broadband, up from an earlier proposal of 95 per cent, according to the new rules and timetable for the much delayed auction of 4G spectrum published by regulator Ofcom.
The sale of airwaves, which could fetch a one-off windfall of £3 billion (€3.6bn) for the Treasury and millions more in annual licence fees, have been delayed by intervention from government and threats of legal action from rival mobile phone networks.
The updated rules remove previous guarantees that two of four UK mobile phone networks – Three and Everything Everywhere – would be reserved a certain amount of valuable spectrum in the 800MHz band, which is currently being used to broadcast television channels. This will be freed when the analogue signal is switched off and all TV sets become digital by the end of 2012.
Three is the smallest network by customer numbers, with just under 10 per cent of subscribers, while Everything Everywhere is the largest, having been formed by the merger of Orange and T-Mobile. Both had argued they should have space reserved in the 800MHz spectrum because, unlike Vodafone and O2, none of their current spectrum is in a band below 1000MHz.
The lower spectrum bands can send radio waves over longer distances, meaning they require less masts and are cheaper to build networks around.
Ofcom has said that it could at a later date introduce protection for Three, or a new entrant, but not Everything Everywhere.
Its consultation document states: “UK consumers would be likely to benefit from better services at lower prices in future if there were at least four national wholesalers of mobile services, as at present. We therefore think it is appropriate, and so propose to, in effect, reserve some of the available spectrum for a fourth national wholesaler.”
Whether Ofcom decides to reserve spectrum for Three or a new entrant will depend on who buys a large chunk of spectrum Everything Everywhere has been ordered to sell as a condition of its merger.