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UK 4G spectrum auction delayed

September 6, 2011

The UK government’s largest ever spectrum auction has been delayed, with the multibillion pound sell-off now expected in the second quarter of next year at the earliest.

Ofcom had been expected to publish the terms of the auction this month, but after veiled threats of legal action from a number of carriers including O2, the document will not now be ready until November. This means the auction can no longer begin as planned in the first quarter of 2012.

An Ofcom spokesman said: “We are still aiming for the first half of next year. However, we have always maintained it is an ambitious timescale.”

A court case would delay the rollout of 4G licences, which would benefit the UK’s three largest companies, O2, Vodafone and Everything Everywhere, but severely disadvantage Three, the smallest and newest mobile carrier. This is because the older companies have spare spectrum which Ofcom in January gave them permission to reallocate from simply making phone calls to data activities such as internet access. Three has no spectrum to reallocate, and has made a play for smartphone addicts by remaining the only operator to offer genuinely unlimited broadband access to customers for a fixed monthly fee.

The difficulty for Three is that it will run out of capacity to carry data traffic before its larger UK rivals. The forthcoming auction should allow successful bidders to roll out 4G services by the end of 2013.

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