UK 4G auction kicks off in total silence

Money is on the table, but no details 'til the fat lady sings

The UK has opened its auction of radio frequencies suitable for high-speed 4G mobile internet services. Who exactly is bidding in which bands will remain a secret until the sale ends.

The auction includes chunks of spectrum cleared by the switch-off of analogue telly and the move to digital TV, known as the 800MHz band, and the "3G Expansion" band at 2.6GHz. The 28 lots are expected to raise between £3bn and £5bn for Blighty's coffers, but it is likely be a quick auction reaching the lower end of that range.

It's not just the incumbent mobile networks bidding; there's also BT, MLL Telecom and PCCW. As we've said before we'd expect the first two to bid on the low-power licences for campus-wide networks, while the latter is probably interested in the chunk of 2.6GHz reserved for TDD LTE, so the proper mobile phone bands will be divided up between the existing players.

There's still some contention, though: all the operators will be grabbing all the 800MHz slots they can, although the auction rules ensure that mobile network Three will end up with a decent allocation.

But one of the 800MHz bands comes with an obligation [PDF] to reach at least 98 per cent of the population of the United Kingdom, as well as a few other caveats, which will make it less valuable.

That will stretch the auction out a little. No one is saying how long, but we'd guess the numbers will come out early next month.

Meanwhile EE has changed its 4G pricing, introducing a £31 plan with a 500MB cap and a handset, along with a SIM-only plan offering 20GB of data at £46 a month, realising that its monopoly on 4G is about to run out so more competitive pricing is in order. Those prices will almost certainly drop again once all the networks have 4G capability, but not by much as operators see 4G as an opportunity to rebalance billing as well as increasing speeds.

Right now mobile data is subsidised by voice calls. Networks like Three admit that 95 per cent of its traffic is data, but that traffic only supplies 30 per cent of its revenue; the rest comes from voice and SMS. That's clearly not sustainable, so the cost of data will have to increase (Americans already pay a good deal more than Brits, as does most of the world) and "4G" could provide the perfect justification for such a price hike. ®