Attempt to extract more from UK MNOs in auction
The UK’s Ministry of Defence (MOD) was set to auction 200 MHz worth of 4G spectrum by Q3 2014. Now the sale is expected to be delayed until late 2015 or even 2016 after the MOD’s decision to hand the whole process over to the UK comms watchdog, Ofcom. The reason is obvious. The UK government wants to extract as much dosh [money] as possible from the UK’s struggling Mobile Network Operators (MNOs). It was disappointed that the original auction of spectrum for 4G in the UK back in February  raised only £1.2 billion which was far less than the £3.5 billion that the UK government expected. The irony is that Ofcom was responsible for that cock-up [disaster].
If Ofcom hadn’t been duped into allowing the Franco-German operator, EE (formerly Everything Everywhere), into using 1800 MHz for 4G for free, then the auction might have raised more money.
Back in 2000, the auction for 3G spectrum raised an impressive £22.5 billion, although observers universally agree that the operators overpaid.
It will be interesting to see how the disadvantaged three UK MNOs – Vodafone, O2 and Three UK (3UK) react to this news.
GoMo News reckons that if they have to wait even longer for the spectrum to compete against EE, they might protest.
Perhpas, Ofcom should simply divide it up for free amongst the three? After all, Ofcom devalued 4G spectrum by giving it away for free in the first place.
The 1800 MHz spectrum in question wasn’t even acquired in the 3G auctions. It was intended for 2G.
The UK’s Minister for defence equipment, support and technology, Philip Dunne, is quoted as saying, “Ofcom are experienced in managing radio spectrum sales. I am confident they will oversee a competitive and fair process.”
in the 3G auctions, the UK government effectively hired advisors with PhDs in gambling and psychology, in order to ensure the participants outbid each other for 3G spectrum.
O2 (now owned by Spain’s Telefonica) is on record as saying it definitely overpaid for its 3G allocation.
4G spectrum is currently in high demand as mobile operators Vodafone, O2 and Three roll out their high-speed networks across the UK in an attempt to compete against EE’s 10 month lead.