January 25, 2013

Secret 4G Auction Kicks Off

secret-4g-auction-kicks-off

I can’t remember how long I’ve been writing articles about the UK’s 4G Auction yet it seems like it was in the last millennium and probably was. However, we’ve now moved from neutral into forward drive and the “real auction” has actually started. The bad news is it takes weeks to conclude and will likely conclude in March.

 

The 4G Auction – who are the applicants

EE is the only 4G mobile operator in the UK after they were given a concession to offer 4G mobile services via their old 2G frequency GSM band which was no longer used. They have enjoyed a monopoly on 4G since late October which will continue until sometime around June this year.

 

Whilst the other 4G contenders take part in the 4G auction, EE are doing all sorts of marketing deals such as partnering with Phones 4U who are now an MVNO to sell 4G phones and tablets to consumers, appointing both Avenir and Carphone Warehouse as Business dealers to sell to their business users and a couple of sponsorship deals involving Wembley Stadium and one for the BAFT Film awards next month.

 

To recap seven companies have paid the £100K 4G auction application fee and their applications have been accepted. The seven applicants are : Everything Everywhere ( EE ), Vodafone, O2, Three, MLL Telecom, HKT UK and Niche Spectrum Ventures Limited ( a subsidiary of BT Group plc ). More on MLL Telecom, HKT and BT bids here.

 

The 4G Auction – what happens next

The auction is a very serious business and of course this is why it may take 8-10 weeks to finish. All auction bids are done on-line in secret using a purpose-built software program. The whole process will be overseen by a recently appointed firm of Lawyers ( RPC Lawyers ) and this is to ensure the auction is processed in a fair and competitive environment whilst keeping any threat of legal actions from the various parties out of the equation.

 

The auction itself is a start – stop – start process as the bidding and the eventual outcome is decided. The process involves selling 28 slices of 4G frequency spectrum and a potential of over 3000 bidding possibilities. Two frequency bands are involved – the 800MHz and 2.6GHz bands.

 

The auction will continue in “secret” between Ofcom and the 4G auction applicants until the process is fully exhausted and the successful bidders are confirmed as 4G Mobile Licence holders. The auction is expected to raise up to £3.5 Billion for the UK Government.