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Further delays to 4G auction ‘almost inevitable’

Further delays to 4G auction ‘almost inevitable’

Ovum analyst Matthew Howett criticises the government for lack of action over the spectrum awards

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It is ‘almost inevitable’ that the much-delayed 4G auction will be sent back to the drawing board and held up by more litigation from mobile operators who object to Ofcom’s plans for the joint award of 800Mhz and 2.6Ghz spectrum, an analyst has predicted.

Analyst Matthew Howett, practice leader at Ovum, has criticised the government for not taking action to ensure the auction remains on track, and said that communications regulator Ofcom has created an auction process that is too complicated.

The auction was due to be held in the first quarter of 2012 to ensure the UK does not fall behind other countries in Europe who are already rolling out next generation networks. However, it was revealed in October last year that the auction will now be held in the final quarter of 2012 because of a number of complaints being brought forward by the UK’s mobile operators.

Howett’s comments come on the same day Everything Everywhere has launched a campaign to promote the importance of bringing 4G to the UK as soon as possible.

The company has unveiled a promotional website and some research that suggests the rollout of next generation mobile networks could add 0.5 per cent to the UK’s gross domestic product (GDP) by the end of the decade, create 125,000 UK jobs and unlock £5.5 billion of direct private investment into the UK economy by 2015.

Initial proposals laid out by Ofcom have been altered through a series of consultations, but the main area of concern from industry players is the regulator’s plans to allocate a minimum amount of spectrum to the UK’s smallest player Three, in a bid to ensure effective competition in the market.

“The industry generally feels that the auction is very complex. The biggest opposition is still that Ofcom are guaranteeing Three access to some spectrum, and I can’t see them scrapping that entirely,” said Howett.

“Ofcom wants Three in the market. The problem is that the way Ofcom has done it with these minimum spectrum portfolios, is that they have made it a very complex auction, and that’s not a good thing. You have got CEOs deciding whether or not to bid in a game that they may not fully understand,” he added.

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