Regulatory body Ofcom is to delay the auction of its 4G spectrum due to a number of technical and competition issues around the sale.
The body had intended the much-coveted 4G spectrum to be auctioned in the first three months of 2012, but following a number of issues, including a legal challenge from 02 earlier this year, the auction deadline has been extended by up to three months.
4G offers high-speed broadband to mobile devices. A recent trial in South Newquay using LTE (a type of 4G mobile network) is capable of achieving download speeds of 100Mbps for mobile connections and faster speeds for fixed connections.
An Ofcom spokesperson denied that O2 had thrown a spanner in the works by claiming the proposed spectrum floors of the auction were illegal under EU law. "Ofcom has been very explicit in its aim to begin the 4G auction as soon as is practicable and this remains our objective. This is a complex area, involving a large number of technical and competition issues that we need to consider and resolve before finalising proposals," he said.
O2 said there are elements of the initial proposals that it supports and others where it believes Ofcom needs to simplify. "This is still part of the consultation process and we are currently waiting for Ofcom's views on the number of responses it received earlier this year. At this stage we see no reason why a successful auction cannot be delivered next year as planned," the company said.
Delays a threat to competition
Mobile operator Three has complained that a delay in the auction could put the operator at an unfair disadvantage. Three lacks the same amount of 3G spectrum obtained by its rivals for free in 1991.
David Dyson, CEO of Three, said: "There is a growing realisation of the role mobile can play in meeting the government's universal broadband commitment by 2015. Any significant delay risks impacting this and will further weaken competition to the detriment of UK consumers."
But Rob Bamforth, principal analyst at Quocirca, said the most important issue surrounding the spectrum sale is that smaller players receive their fair share - rather than the commercial wranglings between Three and the leading operators; Everything Everywhere, O2 and Vodafone.
"Essentially this is not just about consumer mobile operators. I'd like to see regulation that ensures smaller players receive a share, based on sensible business propositions. It's not just about providing regional coverage but the layering of super services within specific areas - something the consumer mobile operators are not necessarily geared up to do as that is not their primary business model. More specialist suppliers need to be encouraged."
Ofcom's spokesman pointed out the timing of the spectrum sale is a moot point as mobile operators will not be able to start rolling out 4G networks until 2013 regardless of when the auction takes place.