4G auction results revealed by Ofcom

The initial results of Ofcom’s 4G spectrum auction are in, and although it failed to reach the price estimated before bidding began, all the major network providers have secured bandwidth to create 4G networks across the UK.

The biggest spender was Vodafone, paying a total of £790 million in order to secure multiple bands on the 800MHz and 2.6GHz frequencies – despite company CEO Vittorio Colao saying 4G was just for technology freaks. This should make Vodafone the second biggest 4G network, with roughly 31% of the spectrum.

EE was the second biggest bidder, despite having an existing 4G network that has given it a five month advantage over the competition. Spending roughly £588 million, again on multiple frequencies across the 800MHz and 2.6GHz bands, EE has secured itself as the UK’s biggest 4G network with around 40% of the entire spectrum. CEO Olaf Swantee said he was “extremely pleased ” with the auction results, and that “Coupled with our existing 1800MHz 4G network, it consolidates our position as the most advanced, largest and most capable 4G operator in the UK.”

Three concentrated on the 800MHz frequency, bidding £225 million for two separate bands. This frequency was freed up during the digital switchover, and should let networks push out wider-ranging coverage to less populated areas. We already know that Three won’t charge extra for 4G so this move should help the company expand into 4G while still maintaining its commitment to 80% coverage of DC-HSDPA by March.

O2 placed a £550 million bid on the 800MHz frequency that included a coverage obligation to provide indoor reception to 90% of the UK’s population by 2017. Company CEO Ronan Dunne said that “it is our intention to go beyond what has already been offered in the market and give our customers a unique and exclusive range of digital experiences” – although quite what that means won’t become clear until the bids are finalised.

Perhaps the biggest surprise was BT, bidding £186 million for several 2.6GHz bands despite not having a mobile network. Ian Livingston, BT’s Chief Executive, said “We have said that we do not intend to build a national mobile network. Instead, this spectrum will complement our existing strategy of delivering a range of services using fixed and wireless broadband.”

The auction generated £2.34 billion for the UK government, but fell short of the expected £3.5 billion estimate. It’s also a massively reduced figure compared to the 3G auction in 2000, which generated £22.5 billion for the country.