Date set for 4G airwaves auction

Surfing the net will be more pleasurable on 4G networks

Ofcom's chief executive Ed Richards has laid out the timetable which will pave the way for next-generation mobile services in the UK.

The airwaves that will enable 4G networks will be auctioned off in the first half of 2012, Mr Richards said.

It means the spectrum will become available from 2013.

The auction was originally earmarked for 2009 but was delayed because of legal action by mobile firms.

Mr Richards announced the timetable at the FT World Telecoms Conference.

Level playing field

He warned that "further litigation against the government or regulator will jeopardise this timetable".

Mobile operators have been arguing over the distribution of existing spectrum.

Ofcom had originally planned to redistribute spectrum allocated to O2 and Vodafone, prompting the two operators to launch legal action against the regulator.

Historically the 900MHz slice of spectrum has belonged exclusively to O2 and Vodafone because they were the only two mobile operators on the market when it was handed out.

Ofcom dropped its plans to share out its spectrum, following the merger between T-Mobile and Orange.

"In the light of the merger, there was not such an unlevel playing field," said Ovum analyst Matthew Howett.

It prompted Vodafone and O2 to drop their legal action, paving the way for the auctions to go ahead.

"There is still the threat of legal action but operators are more interested in getting this over and done with," said Mr Howett.

More capacity

The auction will see two chunks of the spectrum - the 800MHz and 2.6GHz bands - sold off.

Both have great value to operators.

The 800MHz slice - which has been freed up by the switchover to digital TV - allows mobile signals to travel over greater distances, making it invaluable in the search to find ways of bringing broadband to rural areas.

The higher capacity 2.6GHz band will be more useful in towns and cities where lots of users require services.

The delay in the sale of spectrum means that the UK will be behind other countries in offering services. Germany has already auctioned off its digital dividend spectrum and others are planning to do so soon.

For consumers 4G or LTE (Long Term Evolution) services will mean more capacity on the networks.

"They will have a more enjoyable experience using mobile broadband," said Mr Howett.

The popularity of smartphones has meant an explosion in demand for mobile data.

It could mean even next-generation networks run out of capacity, thinks Stephen Rayment, chief technology officer of BelAir Networks.

"Mobile data traffic is already on track to exceed the capacity that will be available in forthcoming LTE and 4G networks. Consequently, buying new spectrum is no longer a speculative move for mobile operators, it's an absolute necessity," he said.

Despite the demand for new networks, Mr Howett predicts the spectrum will sell for a lot less than its 3G equivalent which raised £22bn for the Treasury when it was sold in 2000.