4G: The results are in

 
Smartphone user En route to faster data?

The prize was, in theory, extremely valuable - the spectrum needed to bring fast new mobile phone services to customers across the UK. But at the end of a complex bidding process, the 4G auction has raised £2.34bn - about a 10th of the price paid at the 3G sale 13 years ago at the height of the dotcom bubble. It's also more than £1bn short of what the chancellor estimated in his autumn statement.

Ofcom is, however, congratulating itself on a smooth auction process, with no leaks during the secret bidding rounds over the past month. The regulator says it was not its job to extract the maximum price for the Treasury, but to secure the best possible outcome for consumers.

So Ed Richards is pleased that along with the four existing operators - Vodafone, O2, EE and Three - the winners include a new player, Niche. You may not have heard of this company, but you'll know its owner BT.

Britain's biggest telecoms provider got out of mobile phones a decade ago when it sold off Cellnet, which became O2. Now it is back with a healthy chunk of the 2.6Mhz spectrum which is best suited to handling high data traffic in cities. BT is stressing that it is not planning to operate a national mobile network, but will be using its spectrum to boost its fixed and wi-fi networks for businesses and consumers.

Why was the bidding so low?

Rory Cellan-Jones reports on the 3G auction in April 2000

Perhaps because the bidders had watched the experience of EE, which was allowed to launch its 4G network early. Despite a very high profile advertising campaign, results yesterday appeared to show that its customers had only a limited appetite for the new service. (I speed-tested the 4G network last October.)

Even if the Treasury is disappointed, the auction may be good news for the 4G rollout. We can now expect plenty of competition to offer fast new mobile services across the UK. But those people in 3G "notspots" will be hoping that this time they will not be left out of the faster future.

 
Rory Cellan-Jones Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this
    +5

    Comment number 76.

    The phone companies are keeping very quiet about this... but... you don't need to sign up to a 4G tariff to get 4G, if you've got a 4G-enabled phone. All the phone companies give you is a SIM, which only holds your contacts, number, and registration. In most models you can simply swap your SIM over, and you get 4G speed on your existing 3G tariff.
    Don't let them con you.

  • rate this
    -1

    Comment number 75.

    20 years ago we had Johnny Cash, Bob Hope and Steve Jobs .Now we have no Cash, no Hope and no Jobs. Please don''t let Kevin Bacon die.

  • rate this
    0

    Comment number 74.

    So £6 a month extra for very fast internet, but I am restricted to 500mb a month of downloads... If I was to download at full 60mb speed my monthly bandwidth would have run out in 100 seconds...
    ------------------------------------------------------------------------
    People get confused between Mbps and MBps... it actually works out at just over 1 min or at 60 Mbps its 450,00 MB/min....

  • rate this
    0

    Comment number 73.

    I am delighted with the news that the mobile operators will be able to spend more on service and less on buying the privilege of investing £billions to help economic recovery by bringing the UK into the 21st Century. BT's attempt to buy their way back into mobile makes far more sense than their attempts to build a content business.

  • rate this
    +1

    Comment number 72.

    70.anotherfakename - That is definately a factor. Most of the operators still get their cash from voice revenue, which is dropping. Although most of the traffic on those networks is now data, the revenue from that shows no sign of being able to replace it.

  • rate this
    +5

    Comment number 71.

    @ 60.
    Scaramanga
    'Snip' Just renewed with Orange and avoided EE 'Snip'

    Orange IS EE, if it doesn't say EE on the top left of your phone yet, it soon will.

  • rate this
    0

    Comment number 70.

    Perhaps the phone companies don't see a massive profit being available from it? Peoples budgets are squeezed so they won't pay through the nose for something they don't need. Therefore it seems the profit will be lower, so the price to be paid for the licence is lower. Government wrong to sell in a recession when the price will be low, but brains was never governments strong point

  • rate this
    0

    Comment number 69.

    3G was such a let-down, failing to deliver the promises of faster-this and faster-that, that people aren't falling for it again - so many still don't have access to it. A case of once bitten, twice shy perhaps?

  • rate this
    +4

    Comment number 68.

    Except that the products they're all pushing are LTE. This is NOT 4g, it hasn't met the standards.

  • rate this
    0

    Comment number 67.

    "Despite a very high profile advertising campaign, results yesterday appeared to show that its[EE's] customers had only a limited appetite for the new service."

    Limited pockets more like. Why pay premium rates for such disproportionately low download limits?

    Now the auction is done hopefully the competition can force EE to sort themselves out!

  • rate this
    +2

    Comment number 66.

    Unfortunately the operators are just looking for another product to sell, they may have been better off improving coverage of 3G. The big winners from this will be the handset manufacturers who take a big chunk of the contract values stealing money from network infrastructure leading to a shortage of bandwidth for too many customers. Operators should be forced to charge for bandwidth availability.

  • rate this
    +2

    Comment number 65.

    After buying my wife an iPhone 5 I walked into an EE shop and asked about upgrading to 4G. Our current deal was £30/month unlimited data. The deal they had on offer was £36 a month for 500mb of data.

    So £6 a month extra for very fast internet, but I am restricted to 500mb a month of downloads... If I was to download at full 60mb speed my monthly bandwidth would have run out in 100 seconds...

  • rate this
    0

    Comment number 64.

    Telecoms industry is still consolidating so why pay more for something that you could buy a company for and get the whole thing cheaper still.

  • rate this
    -2

    Comment number 63.

    I take offence when someone insinuates that I have been suckered by making an informed choice to sign up for 4G. I signed up and love it. The speed test results show the fact that my download speed has increased by 10x. To be honest, the more people that don't sign up the better. I'd like to keep my 20Mbps for as long as possible.

  • rate this
    0

    Comment number 62.

    With the latest digital demands heading for 5G, why invest in 4G? The financial hangover has killed the consumer appetite to upgrade and company funds for expensive rights. There are already complaints of 3G being dumbed down to make 4G look better although in time it will probably be accepted as old kit becomes redundant.

  • rate this
    0

    Comment number 61.

    The 3G auction was designed by game theorists at Cambridge University, they were asked to guarantee maximum revenue, that's exactly what they did. The result was money for the government to waste immediately, instead of a spread out tax on profits over a longer period.

    The 4G licences have avoided this, and the decimation of the mobile engineering companies that followed the 3G auction too.

  • rate this
    0

    Comment number 60.

    Just renewed with Orange and avoided EE, I got the very nice Samsung S3 LTE (4G enabled) free but stayed on 3G, now I suddenly get 3G+ thanks to an improved chipset over my HTC Desire HD and I can stream video fine. Why pay extra for 4G.

    EE CEO Olaf Swantee was on the BBC saying you need 4G to stream video/tv etc, this is simply untrue and shows how desperate they are getting....your fired.

  • rate this
    +1

    Comment number 59.

    1, Two of the bidders for 3-G (Deutsche Telekom & France Telecom) merged in 2009, reducing competition.
    2. The finance for the 3-G licenses was bank funded. This isn't possible right now, and the debts led to a crash in telecoms sector shareprices, not something they want to repeat.
    3. Telefónica are nearly broke & Hutchison Whampoa are asset rich/cash poor - so they couldn't afford more.

  • rate this
    -2

    Comment number 58.

    @Old Father Thames

    Actually I'd argue it would mean less people walking around looking at a screen. Faster speeds = Less load times. More time for everything else.

  • rate this
    +3

    Comment number 57.

    Why did the 3G auction greatly exceed expectations?

    Is it because the people doing the projections have no idea what they're doing?

 

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