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The bidders must pay any outstanding sums for the frequencies before midnight on February 21.
Faster services on the 4G frequencies will begin appearing within six months, Ofcom said. The bids came in lighter than the £3.5 billion that UK Chancellor of the Exchequer George Osborne forecast in November. Ofcom had said it wanted to raise at least £1.3 billion.
“It’s a good thing that they didn’t have to spend billions more because arguably they now have more money in the bank to put into actually building the network,” said Matthew Howett, an analyst at market researcher Ovum.
“If you go to the 3G auction 10 years ago, they had to spend so much money that they were able to invest very little in actually building out those networks, which is arguably why we have such poor 3G service today.”
Deutsche Telekom AG and France Telecom SA’s venture EE will pay £588.9 million, according to the statement. Hutchison Whampoa Ltd’s Three bid £225 million.
BT Group Plc, the biggest fixed-line company in the UK, will pay £186.5 million, and Telefonica SA’s UK division will spend ¤¤£550 million.
‘Spring’ rollout
The 3G auction in 2000 during the height of the dot-com boom raised £22.5 billion.
Vodafone shares fell 0.2 per cent to 163.2 pence at 8:23 am in London trading. BT dropped 0.1 per cent to 277.3 pence. Telefonica rose 0.1 per cent to euro 9.81 in Madrid. France Telecom, which said it may spin off part of EE by the end of the year, rose 2.7 per cent to euro 7.93 while its partner Deutsche Telekom declined 0.5 per cent to euro 8.27 in Frankfurt.
Mobile-phone service on 4G will be several times faster than current third-generation networks and will have greater capacity, giving users the ability to use more high-bandwidth services such as video streaming or uploading large files.
The companies still must bid for their preferred position within the bands, Ofcom said. This process “will take place shortly,” the regulator said. Operators will be able to start offering services as early as the spring.
Network service supplier MLL Telecom Ltd and Hong Kong phone company HKT didn’t submit winning bids, Ofcom said.
EE, the largest UK wireless carrier, was the first to begin selling 4G service last year when it rolled out the new technology on existing spectrum.
“4G coverage will extend far beyond that of existing 3G services, covering 98 per cent of the UK population indoors— and even more when outdoors —which is good news for parts of the country currently under-served by mobile broadband,” Ofcom Chief Executive Officer Ed Richards said in the statement.
