4G auction disappointing as Ofcom gets estimate wrong
The recent 4G auction raised £2.34 billion from five different major telecom operators. While these figures may sound astronomically high, they are actually 33% less than what was expected. This has left George Osbourne and his team rather red in the face as he used the original £3.5 billion estimate figure in his figures to prove the UK could significantly cut the deficit. Now, without the additional £1.2 billion, economists have calculated that the UK will more than likely have to borrow further.
However, regardless of the political impact, this is huge news for the mobile industry as finally after half a decade and 50 bidding rounds, 4G will change how we will use Smartphones forever.
The fourth generation mobile wireless speed will change significantly with providers hoping that the speed on 4G will be just as good as if not better than the home broadband connection. In fact, experts are hoping for speeds of more than 10 times what 3G could offer. However, these speeds will not automatically be implemented into existing phones (unless they are 4G ready). Unfortunately, a large percentage of the phones currently on the market are not, so in order to upgrade to 4G, a new phone will need to be purchased.
Of course, Everything Everywhere (EE) has already rolled out a 4G service in the UK, but uptake has been slow to say the least. Many analysts believe this is because contract packages are much more expensive than their 3G counterparts and that 4G data use is limited by these packages, which obviously defeats the purpose somewhat.
Who won the auction?
A total of five different businesses ‘won’ the auction and purchased a percentage of the UKs capacity; EE, Hutchison 3G UK, Niche Spectrum Ventures (a part of BT), Telefonica (O2) and Vodafone.
When will it be available?
None of these companies have set a date for release yet. However, it is widely expected that a late spring/early summer date is realistic.
It goes without saying that there will be many people who are excited about the results of this auction. While 4G is currently operational in the UK, when the major companies start to release their service, the competition will increase, which will solve the current issues.