UK 4G auction results

The announcement by Ofcom today indicates the results of the UK 4G auction. Several interesting points can be gleaned from the numbers released today. 

However, before we look at these, a few words on today's bid numbers at the "Principal Stage". The next stage is the final stage and what Ofcom refers to "Assignment stage" where bidders are told exactly which frequency assignments they will be getting (i.e.  2500MHz-2520MHz paired with 2640MHz-2660MHz etc ). But from experience of Combinatorial Clock Auctions (i.e. the auction format the 4G market assignment followed), it is unlikely that there will be a material increase in the final values paid by the bidders. The assignment stage usually is about bidders valuing particular spectrum lots within a band assignment higher than others because of interference issues at the band edges. Or sometimes when there is fragmentation within a band then the assignment stage resolves this through auction participants paying a premium to achieve contiguous blocks of spectrum. 

However, these two situations are unlikely in the outcome that has resulted in today's announcement and there is unlikely to be a material change in bid values.

Interesting point 1.

BT has got some really interesting 2.6GHz spectrum both paired (for FDD use) and unpaired (for TDD use) which it could use for a metro hot zone type of data network especially in combination with its Wi-Fi value proposition.

Interesting point 2. 

As EE has been able to launch its 1800MHz 4G service, its interest in low frequency 800MHz was evidently lessened (it acquired 10MHz at 800MHz). However, has acquired a significant amount of paired (FDD) 2.6GHz spectrum. There is clearly an intention to bolster its city 4G networks with high capacity 2.6GHz based services.

Interesting point 3.

If you compare the German and the UK auctions on a like for like £/MHz/Pop basis, the German auction bidders paid £0.19/MHz/Pop whilst the UK bidders paid £0.15/MHz/Pop. This equates to a discount for the UK auction of circa £600M. No wonder the Treasury is displeased.

Interesting point 4.

H3G has finally been able to capture low frequency spectrum which can bolster its services outside of major metropolitan areas.