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Who won in the UK 4G auction?signal strength
Wednesday 20 February, 2013, 10:29 - Spectrum Management
Posted by Administrator
4g logoOfcom has today published the long awaited outcome of the first phase of the UK 4G auction. The second phase of the auction is yet to take place. The first phase decided who gets how much of the spectrum, the second phase decides who gets which particular frequencies.

The winning bidders, together with the total price they paid for the spectrum they have won are shown in the table below.
Bidder 800 MHz 2.6 GHz
(paired)
2.6 GHz
(unpaired)
Price
Everything Everywhere 2 x 5 MHz 2 x 35 MHz £589 million
Hutchison 3G 2 x 5 MHz £225 million
Niche Spectrum Ventures (BT) 2 x 15 MHz 1 x 20 MHz £186 million
Telefonica 2 x 10 MHz £550 million
Vodafone 2 x 10 MHz 2 x 10 MHz 1 x 25 MHz £791 million
Total £2,341 million

Can this tell us anything about how much was paid for each of the different flavours of spectrum? Not exactly, but using relatively straightforward schoolboy maths, it's possible to make a decent stab at the value of each type of spectrum (note that this is not 100% accurate but should be in the right ball park). The results are as follows:

Band 800 MHz 2.6 GHz (paired) 2.6 GHz (unpaired)
Price per MHz £25.83 million £4.72 million £2.89 million
Amount Awarded 60 MHz
(2 x 30 MHz)
140 MHz
(2 x 70 MHz)
45 MHz
Total £1,550 million £661 million £130 million

So how does it compare with the results of auctions in other countries? Yet another table shows the outcomes in a selected number of other large European countries. (An exchange rate of £1=€1.2 has been used for the conversion).

Band Price per MHz for 800 MHz Price per MHz for 2.6 GHz (paired) Price per MHz for 2.6 GHz (unpaired)
France £36.6 million £5.57 million
Germany £49.6 million £1.53 million £1.44 million
Italy £41.1 million £3.00 million £2.06 million
UK £25.8 million £4.72 million £2.89 million

penniless chancellorSo the UK has not done as well for the 800 MHz spectrum (if you count 'doing well' as raising as much money as possible) compared to these other countries.

Of course these results are only estimates inasmuch as the maths cannot be 100% accurate without more information, but nonetheless one thing that is certain is the auction has raised significantly less than the £4 billion that pundits were expecting. What will this mean for the UK? On the one hand the UK Government will have a larger hole in its budget than it would have hoped. On the other, perhaps we can expect cheaper 4G services and a faster roll-out than might have been expected. Maybe a victory for the consumer then? Or just the shareholders of the mobile companies?
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