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Ofcom 4G auction plans get cautious welcome

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Samsung Galaxy 3 Mobile Phone displayed at the Samsung Galaxy 3 Mobile Phone launch at Earls Court Exhibition Center, London

© Rex Features / Ray Tang

Mobile phone operators and consumer groups have given a cautious welcome to Ofcom's plans for a major auction of mobile spectrum to enable the launch of 4G services in the UK.

The media regulator said today that the auction process will get underway later in the year, when mobile operators will signal their interest to bid for 80% more spectrum than was sold off in the multi-billion pound 3G auction in 2000.

Bidding is expected to start in early 2013, and Ofcom expects 4G services to start rolling out to British smartphone and tablet users towards the end of next year.

Bob Warner, chairman of the Communications Consumer Panel, said that he was pleased that Ofcom had taken into account a number of recommendations, such as the onus on winning 4G bidders to also boost mobile broadband coverage to almost all of the UK.

"Rolling out mobile broadband to at least 98% of people will also ensure that people who have poor or non-existent mobile voice coverage will finally benefit too," he said.

"Consumers in the UK have been waiting for some time for the benefits from 4G. We now call on Ofcom and the operators to deliver this without further delay."

A spokesperson for mobile giant O2 said the firm was still digesting Ofcom's lengthy report on the 4G auction, which runs to more than 1,000 pages.

"Ofcom's detailed rules for the auction represent a significant step towards 4G launch in the UK," said O2.

"While Ofcom has taken a number of our suggestions on board, they are combined with other changes to the previous proposals. We will need to study the package in detail before responding."

Vodafone UK also said that it was still studying the lengthy report, but noted that Ofcom "appears to have created a mechanism to deliver the spectrum needed to run competitive 4G services".

"A competitive market for the next generation of mobile internet services will bring substantial benefits to British consumers, businesses and the wider economy," said a Vodafone UK spokesperson.

"Ofcom appears to have created a mechanism to deliver the spectrum needed to run competitive 4G services and we welcome the work it has done.

"We also support the regulator's desire to see 4G services delivered to as many people as possible. However, we will obviously need to study today's lengthy documents to make sure they deliver the fair and open auction that this country needs."

Three, which has previously expressed concern that it could be forced out of the 4G spectrum race, warned that Ofcom's decision on the structure of the auction "will have a lasting effect on the choice of services and value available to mobile consumers".

"We are working through the detail of this very substantial document to evaluate what it means for both consumers and competition in the UK mobile market," a spokesman added.

Ofcom believes that 4G mobile connectivity is vital to enable UK consumers to benefit from next-generation of mobile internet services, as the frequencies can support considerably faster connection speeds.

The regulator has published a draft of the legal instruments that will underpin the auction structure. A statutory consultation on this is open for submissions until September 11, 2012.

Also today, the regulator said that it will announce its decision "in due course" on a separate proposal by Everything Everywhere to reuse its existing spectrum to roll out 4G services as early as this year.

Critics of the plan, including Vodafone, O2 and Three, claim that Everything Everywhere - the joint venture of T-Mobile and Orange in the UK - is actually trying to get an unfair headstart in the market for 4G. Everything Everywhere denies these claims.

Meanwhile, Three issued a report today indicating its smartphone customers have doubled their mobile data use over the last year - and they now consume an average of 1.1GB of data each month.

This rises to 1.5GB for Three's customers who use iPhones or premium Android smartphones.

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