4G licences only raise £2.34 billion in auction

It beggars belief that the UK Government has only managed to raise just £2.34 bn in licence fees for the the 4G licences.  It really does suggest that both the UK Government and Ofcom are totally disconnected either from the potential of the mobile internet market or they are totally incompetent at running an auction.  Whilst it was clear from the start that the market would not pay the astronomical figures paid for the original 3G licences of £21 billion raised by Gordon Brown,  the value of these licences should have achieved far beyond the Office of Budget Responsibilities own projection of £3.5bn, let alone the £2,34bn delivered.  Everything Everywhere, Hutchison 3G UK, Telefonica (O2), Vodafone (VOD) and BT (BT.A)'s Niche Spectrum Ventures secured the 4G licences.  It is a little disappointing that the winning bids all came from the usual suspects and that we will not see any new entrant to spice up the cosy market carve up between the major mobile networks and BT.


Given that the UK is one the largest mobile internet markets and combined with the superior quality of coverage and speed of performance offered by 4G’s 800 MHz network, the winning network providers and service providers stand to make significant revenue.  The mobile broadband should provide smartphone and tablet computer users with "superfast" download speeds, and will provide £20 billion of benefits for UK consumers over the next ten years, Ofcom said. 

However, when mobile operator EE, a joint venture between T-Mobile and Orange, became the first to launch a 4G service in October 2012 in a brief monopoly, it struggled to attract users. It was forced to cut its prices in January, lowering its entry price to £31 from £36 a month.

Despite this slow take up, I still believe that 4G has the power to become the de facto communications network for Internet access in the UK - a view clearly shared by BT - which is why they entered the auction to secure 4G capacity which they are using to extend their WiFi network.  4G has the capacity to be a game changer in technology terms and could change the local access in remote locations of 100 MHz Ethernet speed access reducing the need to take fibre to the home.

There may not be champagne corks popping in No 11 tonight, but I am sure they will be in the HQs of our major mobile providers.

Australia shows how to create a 21st Century Network

Australian Prime Minister Kevin Rudd has created a public private partnership to sort out the country's poor broadband network.

The programme aims to link 90 per cent of Aussie homes, schools and businesses with speeds of up to 100 Mbps - true FTTH. The remaining ten per cent of premises will get wireless or satellite links with speeds of up to 12 Mbps

The government is establishing a company to build the fibre network which it expects to cost $43bn (£20.8bn) and take eight years to complete. It will provide jobs for 25,000 people a year on average.

The government will be the majority shareholder, but intends to sell its stake within five years of the network being completed. The cash will come from the sale of consumer Aussie Investment Bonds (AIBs) and funds from the Building Australia Fund.

Rudd said slow broadband was holding Australia back. He compared a decent fibre network with the railway networks of the 19th century.

He reckons the project is Australia's largest ever "nation-building infrastructure project". Rudd had asked for private sector bids for the work but none were considered viable.

The first step will be negotiating with Tasmania which could start its fibre to the premises network as early as July. New builds will be required to provide fibre from July 2010.

Alongside this huge investment Rudd promised wholesale telecoms reform - the public has until 3 June to make its suggestions for changes.

Australia has always suffered from slow and expensive broadband for years.  Some of this can be blamed on geography, although the incumbent telco, Telstra, is also culpable..

However, if Gordon Brown is serious about providing Britain with a 21^st Century infrastructure he should start talking to Rudd.  Guaranteeing that everyone will have access to 1.5Mbps is just pathetic and we will continue to languish in the bottom division of broadband access.   In a previous article I referred to the developments of Fibrecity projects by i3 Group Ltd.  These guys deserve massive support to roll out the planned 15 locations as quickly as possible.

We need to join the Ethernet club now and get full FTTH to every home in the country and stop relying on the whining of BT experimenting with some 40Mbps service options.  It just will not do.  The UK needs an integrated national fibre infrastructure not some half baked commitment to ADSL access and the cost  of full FTTH would far less than saving a single fat cat bank, have lasting value and create thousands of jobs.