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

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  • rate this

    Comment number 96.

    Because, last time, everyone paid to much for 3G and a lot of people went belly-up. It was only just over a decade ago and people still remember.

    Sadly when it comes to needing a bailout, telecom firms are far less likely to help than when governments bail out banks.

  • rate this

    Comment number 95.

    Because that is auctions for you.

    And to be honest, that was one very broad figure from the OBR - others had predicted higher and some had predicted much lower.

    Not an accurate science. But I am sure journalists will agonise over it for hours.

  • rate this

    Comment number 94.

    Who wants to pay through the nose for 4g when you can watch the content on a pad using free wireless?

  • rate this

    Comment number 93.

    The reason that the 3G auction raise so much money was that there were only as many licenses available as there were current suppliers, it only needed one extra bidder to join in and it became a death match. You win a contract or you die. If I'd been a foreign mobe company I'd have bid, hoping to lose, just to drive up costs for my competitors on the global scene. It didn't happen this time round.

  • rate this

    Comment number 92.

    I have a 3G plan with unlimited data allowance for less than the price of the most basic 4G package. This 3G coverage is more than fast enough for streaming TV which I do regularly via Sky Go.

    Why should I pay more for a contract with measly data allowance (which would mean I couldn't stream TV) plus the ability to connect at a speed faster than I need in a some areas of a few UK cities?

  • rate this

    Comment number 91.

    I wonder how many government people, both indirectly and directly with the bid, end up with nice paying jobs in the coming years?

    A One Billion "saving" should pay for quite a few luncheons and celebratory champagne.

  • rate this

    Comment number 90.

    It was a stupid idea to allow EE early access, the rest of the players sat back and watched the market, and then realised it was not as strong as the predictions.
    hence the LOWER bids.

    The Gov' shot themselves and US in the foot by allowing EE an early start

  • rate this

    Comment number 89.

    The reason is that 3G was the promise of all that can be and it turned out to be a Pigs Ear dressed up as a Silk Purse, we all went mad and bought the latest handsets and what did we get?
    At best 2nd rate rubbish.
    The consumer has wised up, they will sit back and wait and then when it is PROVEN to work maybe it will kick off.
    The telecoms players have realised this and bid accordingly

  • rate this

    Comment number 88.

    3 Hours ago
    71. Psyance

    Orange is not EE. Orange, EE and T-Mobile are in fact all owned by Everything Everywhere.
    EE is a 50:50 joint venture between Deutsche Telekom and France Télécom, a merger of their respective UK T-Mobile/Orange businesses.

    EE Paid £588M for this New extra spectrum

  • rate this

    Comment number 87.

    Once bitten(3G Auction), twice shy...
    Probably still over priced.

    But the opportunities with 800 MHz spectrum for greater coverage
    is probably where the biggest benefit comes.
    The GHz stuff great for in town capacity

  • rate this

    Comment number 86.

    The bids were so low because for most of the population 4G is a solution without a problem.
    I can normally get around 4-5Mbps from my 3g connection, and I get unlimited data for £30, why would I pay more money for a limited data allowance.
    The 3g auction nearly bankrupted the telcoms, I am surprised the bids for 4g were not even lower.

  • rate this

    Comment number 85.

    One of the worst cases of missing your target market and getting the product offering wrong, i can remember. Needs to match the current 3g type offering, for a bit more, not far less for me. EE seriously missed the opportunity to corner the market.

  • rate this

    Comment number 84.

    I tried 4G for a month last year and went back to 3G where my contract gave me unlimited Internet for £36 per month as opposed to only 500mb at that price with 4G and a dramatic increase if you wanted more. Since they were selling the service on the basis of fast downloads of video and games which would quickly use up the monthly allowance it's hardly surprising it's not been that successful.

  • rate this

    Comment number 83.

    Is the lower than expected proceeds from the 4G auction bad news? With the 3G auction too much competition stopped the operators putting up prices to recover their auction bids. So instead they cut back their investment in 3G. It was late and coverage patchy. So far from raising too little money it raised too much - every £ Ofcom gives the Treasury will be £1 not spent on the 4G networks.

  • rate this

    Comment number 82.

    The main application for 4G is video. Limited use for it by business (3G often good enough). Consumers can't afford to pay more. Great technology but limited market. Major rethink needed on this one.

  • rate this

    Comment number 81.

    They paid less because the contract makes them provide 98% coverage. They want to cherry pick and supply cities and big towns. Rural coverage is a loser for them.

  • rate this

    Comment number 80.

    71. Psyance

    Orange is not EE. Orange, EE and T-Mobile are in fact all owned by Everything Everywhere.

    They use parts of the same network, but are different brands. Just like a Ferrair isnt a Fiat, nescafe coffee isnt a milky bar.

  • rate this

    Comment number 79.

    £36 per month for 500GB of data? Sounds reasonable to me.

    But do advertising executives know that the difference between MB and GB is a lot more than one character?

    It almost seems it was done deliberately to keep the subsequent auction prices low...

  • rate this

    Comment number 78.

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

    The reason being is that there is no recognised 4G standard as yet. LTE is actually an extension of 3G standards. I know some people are getting all upset about the use of the term 4G but for all intents and purposes in the UK right now LTE is 4G.

  • rate this

    Comment number 77.

    With the government planning to make the 5G spectrum available in 7-10 years the mobile companies are not going to pay over the odds for 4G now. We're too late to the party, hopefully we'll be the first to the party with 5G though.


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