The UK 4G Auction Is Now Officially Underway With Seven Bidders Going for It

By Sam Gibbs on at

Hooray, the official UK 4G auction bidding war is finally underway. Bidders are now free to throw their cash at Ofcom, using what basically sounds like Ofcom's own version of a top-secret eBay.

How much Vodafone, O2, EE, Three and the others are punting, we won't know because it's all confidential, well, until the end anyway. Ofcom's expecting several rounds of bidding, so it's not going to be over by Friday, but we should hopefully know the outcome in the next month or so.

Thankfully, it looks like we're not going to have to wait too long for everyone else, other than EE that is, to roll out their 4G networks once things are done. According to Ofcom:

"Once fees are paid, licences will be granted, enabling operators to start rolling out new networks. It is expected that services will be launched by a range of providers from late spring / summer 2013."

That lines up suspiciously well with EE's new cut-price 4G promotional plans, which end on February 28th, don't you think? Cunning EE, cunning indeed. Anyway, there are 28 lots of spectrum within the 800MHz and 2.6GHz bands up for grabs, which means the seven bidders have a lot to fight over. In theory, the chunks within the 2.6GHz band should provide higher data-carrying capacity and speed, while 800MHz provides greater a coverage footprint and building penetration.

It'll be interesting to see who comes out on top. The auction rules are fairly complicated, but it basically boils down to what Ofcom describes as similar to eBay's auto-bidding system:

"Having identified the winning combination of bids, Ofcom will then work out how much each winning bidder should pay using a so-called ‘second price rule’. Each winning bidder will pay the smallest amount that they would have needed to bid in order to win – as on auction website eBay."

The government's hoping for about £4bn out of this little lot, so we're not talking chump change here. Of course, that's a double-edged sword. The more the networks have to fork out for their allocation of LTE-capable spectrum, the more cost is going to be hefted onto us, the consumers. Seems we'll be paying through the nose either way. [Ofcom]