In December 2012, the UK’s Office of Communications (Ofcom) – the airwaves regulating authority that once controlled all 4G mobile bandwidths in the UK – announced that it would deregulate the airwaves, opening up the nearly three fourths of the 4G spectrum for auction to the highest bidder. The official auction was set to commence at the end of January 2013.
4G Coverage Increases
Though this move may seem to some to be a step in the wrong direction, however upon closer inspection, the privatization of the majority of the 4G broadband spectrum actually means some 98 percent of the UK’s population, including those in more rural and isolated communities, will now have access to 4G networks.
The 2G and 3G airwaves that were once very strictly designated only for providing internet and mobile access in those spectrums can now be reassigned by private access companies as 4G instead. Prior to the auction, EE was the only provider allowed to reassign access in this manner. Today however, thanks to the deregulation of so much of the 4G spectrum by Ofcom, multiple providers can now offer the same dynamic services to their current customers and can additionally offer up their services at the best price to new customers as well.
Setting the Stage for Price Wars
It’s this new competitive environment that now has the stage set for a price war the likes of which the UK hasn’t seen in more than a decade. The last time mobile and internet service providers were vying for customers on this scale was 2000, when Ofcom deregulated the 3G wireless spectrum.
Reassigning 2G and 3G Bandwidths
EE, as the only privatized provider of widespread 4G service, enjoyed a closed market in which prices could be set as the company saw fit up to this point. However, since the Ofcom auction, the competition just got real for EE and the company is now likely wishing they’d not set their prices so high to start with.
With Vodafone, o2, and Three soon to be offering a 4G service, and very likely at prices significantly lower than the previous EE standard, EE’s strategy must change if they wish to hang on to their previous clientele. Vodafone and H3G, the company responsible for Three, plan to revamp their access packages to provide a 4G service rather than 2G and 3G, something that only EE was doing prior to the Ofcom auction.
Auction Schedule and 4G Network Increases
Bidding in the Ofcom auction began the 23rd of January 2013, with seven companies taking part. The auction, which will likely take several weeks and multiple rounds of active bids, will not immediately result in price changes or in 4G coverage changes either. However, the second half of 2013 is likely to be a consumer’s market when it comes to 4G mobile service in particular.
Main Image by renjith krishnan
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