Q&A: What next for 4G in the UK?
- 20 February 2013
- From the section Technology
Five UK mobile operators have paid a combined sum of £2.3bn for spectrum that will allow them to roll out faster 4G mobile services. What does the auction mean for consumers and when will they see services?
What exactly have the mobile operators bought?
The auction sold off two chunks of the UK airwaves. The first, in the 800MHz band, was previously used by analogue TV and freed up by the digital switchover.
This frequency is particularly good for increasing coverage in rural areas. All the operators now have a piece of it which is great news for rural consumers currently struggling to get 3G. It means that many will be able to leapfrog 3G entirely and move to 4G as services begin rolling out in the early summer.
O2 has taken on Ofcom's coverage obligation which means that it must provide indoor coverage to 98% of the UK population by 2017.
"History has taught us that many consumers living in rural areas have had to put up with patchy or intermittent connectivity as providers focus on serving dense cities - O2's obligation to provide improved reception even indoors might go some way to finally rectify this issue," commented Ernest Doku from uSwitch.
The other spectrum sold off by Ofcom was in the 2.6GHz band. This higher frequency spectrum will offer new capacity, much needed as demand for bandwidth sky-rockets.
In total of 250 MHz of spectrum was auctioned in these two separate bands. This is equivalent to two-thirds of the radio frequencies currently used by devices such as tablets, smartphones and laptops.
It raised less money than expected, is this good or bad?
The government had hoped to net £3.5bn from the auction so, as Ovum analyst Matthew Howett put it: "What you can't hear is the sound of champagne corks popping over at the Treasury."
But it does mean that operators will have more money to spend on upgrading their networks, which is good news for consumers.
Experts agree that the £22.5bn price tag for 3G had a knock-on effect to the quality of services.
"It could be argued that the relatively poor 3G coverage we have seen in the UK up until now is at least partially a result of operators being left out of pocket after the last auction that they had very little to actually spend on building the network," said Mr Howett.
What is 4G anyway?
That is a good question and depends on what part of the world you live in. In the UK, and indeed in most of Europe, the operators will roll out Long Term Evolution (LTE) which experts describe as "true 4G".
LTE will require more work from operators who will have to completely upgrade their networks but will deliver speeds of up to 100Mbps - vital for consumers hungry for data.
There are several other flavours of 4G and in some parts of the world, most notably the US, operators have branded souped-up 3G as 4G.
How much will I have to pay to upgrade?
This is the question that everyone is asking and unfortunately it will only be properly answered when services start rolling out.
We have some indications of the prices because EE already has a 4G service up and running - using existing spectrum that Ofcom allowed it to use for 4G.
In fact it recently dropped its prices, offering a basic 4G service for £31 a month.
EE has refused to say how many of its customers have upgraded and this, coupled with the price drop, suggest that it may have struggled to persuade many to upgrade.
It is clear that there will be major price wars as services start to roll out in the early summer and operators fight for new customers.
Three has thrown down the gauntlet by saying that it will not charge a premium for 4G and it is likely that all the operators will try to make 4G as attractive as possible by bundling it with film, music and other bandwidth-hungry services.
Consumers will still need to be persuaded to switch and price will be crucial to this.
"It's vital that prices remain affordable for those unwilling - or unable - to make the big switch," said Mr Doku.