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
    +2

    Comment number 116.

    In the early days extra speed and accessibility made a huge difference - and people were prepared to pay for it. Nowadays we get things so quickly and conveniently that any improvement makes only a very marginal difference to our lives - hence its lack of extra value.

  • rate this
    +1

    Comment number 115.

    4g is worth less because of EU pricing controls/restrictions which have come into place long after 3g implemented.

    It is also worth less because there is much less disposable income in UK for people to pay higher 4g costs & with over 500,000 jobs STILL to be cut, many well paid, & replacemnt jobs being LOWER paid the upper earners are declining & uptake of 4g will be MUCH slower & much LESS

  • rate this
    +1

    Comment number 114.

    That's great, so the mobile companies did learn from the 3G auctions then.

    I also recommend the money is used asap to buy gold, euros or whatever. Just anything before the pound heads into worthlessness.

  • rate this
    +1

    Comment number 113.

    In 2000 Gordon Brown got a £22.47bn windfall from mobile phone licences, this was recorded as just over £1 billion income a year for UK treasury.
    4g has only raised £2.34bn, which is £20 billion less.

    With £20 billion saving 4g services should be MASSIVELY cheaper & could/should also run out much quicker due to lower cost investment

    I doubt consumers will pay less, or 4g running sooner

  • rate this
    +1

    Comment number 112.

    Maybe because the 3G auction happened at the top of the market and operators paid way over the odds?

  • rate this
    0

    Comment number 111.

    2G was good for calls, 3G isn't, no one expects 4G to be even as good as 3G. Why would anyone pay a kings ransom for it? I do most net surfing on a computer I can see, only very little on a phone - and for that a stuffy old dial up as we used on 2G is more than adequate.

  • rate this
    +1

    Comment number 110.

    Mr Cable explained how his previous job had helped with his financial prediction? Very reassuring!

  • rate this
    0

    Comment number 109.

    One reason I won't be signing up to 4G and one reason alone. I don't use 3G as much as I'd like to as I'd overshoot my download limit! Why would I want 4G when i'd just reach that limit faster? Or maybe I've missed something and 4G will come with unlimited downloads?

  • rate this
    +2

    Comment number 108.

    I can't even reliably send a 160 byte text message because the current 3G coverage is so patchy and overused by modern smartphones. And the answer is to introduce a service that encourages gigabyte file transfers and is even more patchy??

    That's about as useful offering cheap transatlantic flights to villagers whose bus service to the local shops has been cancelled.

  • rate this
    +1

    Comment number 107.

    106...

    I'm clearly being sarcastic!
    I'm just making the point that regardless of anything, people will blame Osborne without thinking what the alternative represents.

  • rate this
    -1

    Comment number 106.

    I blame Osborne...
    Get Ed Balls in! I don't care about the debt. Ed&Ed will spend and spend and get us more money.
    I don't plan on having children so the debt can die with me!

  • rate this
    -1

    Comment number 105.

    Also

    3G was originally touted as 'watch video on the move', wasn't it?

    CAVEAT EMPTOR.....COS NETWORK EMPTY....for now.

    'Ah, we're getting to the point where more customers=speeds in areas will be too slow to stream so we'd best NOT have more customers'?

    NO

    My BT broadband, originally ran at 10Mb, new homes on the same exchange and its down to 3.4 adding Infinity will raise it as they move THX

  • rate this
    +3

    Comment number 104.

    I am sure someone will let me know if I am incorrect, but aren't these the frequencies freed up by the switchover to digital which we, the license payers, paid £600m to fund? I understand the need to invest up front to free up the assets and thus enable this sale to be made, but isn't it normal business practice to repay the investment once the assets have been sold?

  • rate this
    0

    Comment number 103.

    Posts saying that connection is 20Mb and 500MB download limit then you can use limit up in 25 seconds...or similar..er no.

    1. The speed is in Mb and the limit in MB....see? MB=Mb*8.unless they've changed it so the above is 200 seconds.

    2. They dont REALLY dl at 20, even when shown speed. Big chunk taken by overhead even on empty net.

    3. Good luck getting 20 in a year on EE, assuming customers

  • rate this
    +1

    Comment number 102.

    I find it so sweet that posts here suggest the poster believes these licenses should be free because then the cost of the contracts to the customer would have been less.

    It must be such a PRETTY world you live in but one constantly hit by sad letdowns as reality sets in.

    They charge what they think the market will bear, not cost+teeny ickle profit margin

    Unless you're EE and you get it SO WRONG

  • rate this
    +1

    Comment number 101.

    It seems odd to me that the government is saying that this 'result' is great because it has allowed a new entrant into the market, thus providing greater choice for the customer in the form of BT's bid.

    Well yes.....except for the small fact that BT have said they will NOT be using their band to create a new mobile network.

    Anyone got the winning bid, er answer...?

  • rate this
    0

    Comment number 100.

    Yes, of course the £1bn shortfall will be passed onto the taxpaying public...where else will it come from. But it wont actually be £1bn when you add the interest from the treasury bonds that will be issued...more like £1.03-£1.07bn, depending upon the time frame....and that;s just the first year.

  • rate this
    -2

    Comment number 99.

    So caMORON, has now allowed "our airwaves" to be sold to "Johnney Foreginer"?

  • rate this
    -1

    Comment number 98.

    >> spectrum needed to bring fast new mobile phone services to customers across the UK
    i fail to see how it 'needed' to do anything. i have never heard anyone complaining about the speed of their mobile broadband, so it seems to me the need for '4g' doesn't exist.

  • rate this
    0

    Comment number 97.

    Why did 4G auction come in £1bn below expectations?
    -----

    One word

    Repressionomics

    Probbly the best article I've seen in 10 years

    Repressionomics - can 'financial repression' solve debt crisis?
    http://www.bbc.co.uk/news/business-17301032

 

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