4G networks will allow operators to offer ultrafast mobile broadband services to consumers and businesses.
Seven companies bid for 28 lots of spectrum in two separate bands – 800 MHz and 2.6 GHz.
The lower frequency 800 MHz band is part of the ‘digital dividend’ freed up when analogue terrestrial TV was switched off, which is ideal for widespread mobile coverage.
The higher frequency 2.6 GHz band is ideal for delivering the capacity needed for faster speeds. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.
After 50 rounds of bidding, Everything Everywhere Ltd, Hutchison 3G UK Ltd, Niche Spectrum Ventures Ltd (a subsidiary of BT Group plc), Telefónica UK Ltd and Vodafone Ltd all secured spectrum.
Announcing the winners, Ofcom Chief Executive Ed Richards, said: We are confident that the UK will be among the most competitive markets in the world for 4G services.
“4G coverage will extend far beyond that of existing 3G services, covering 98% of the UK population indoors – and even more when outdoors – which is good news for parts of the country currently underserved by mobile broadband.”
The auction has raised £2.34bn which will be paid by successful bidders direct to the UK Treasury.
Ofcom allowed Everything Everywhere to launch its 4G services last year using existing spectrum, however high package prices have led to low take up.
Earlier this month rival Three said its users would enjoy 4G speeds at no extra cost when it rolls out the service later this year.
BT says it’ll use its new spectrum “to provide its business and consumer customers with an enhanced range of mobile broadband services, building on its existing strength in wi-fi.”
However chief executive Ian Livingstone said the company doesn’t intend to build a national mobile network.
Instead Livingstone says the spectrum “will complement our existing strategy of delivering a range of services using fixed and wireless broadband.
“We want our customers to enjoy the best possible connections wherever they are and this spectrum, together with our investment in fibre broadband, will help us achieve that.”
Olaf Swantee, Chief Executive of EE, said his company “is extremely pleased with the outcome of the spectrum auction. Coupled with our existing 1800MHz 4G network, it consolidates our position as the most advanced, largest and most capable 4G operator in the UK.
“The acquisition of low and high frequency spectrum allows us to boost our superfast data services and coverage – indoors and outdoors, in cities and the countryside.”
Commenting on the auction outcome, O2 CEO Ronan Dunne said, “Today, Telefónica has made a significant investment in next-generation 4G technology for the UK. While 4G will indeed allow for faster data speeds and a more seamless mobile experience, 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, marking a new generation for the mobile industry.”
To benefit from 4G speeds customers will need a compatible handset such as the HTC One, the BlackBerry Z10 or Apple’s iPhone 5.