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U.K. telecoms regulator Ofcom today announced the the 4G auction is underway with bidding to acquire up to 250 MHz in the 800Mhz and 2.6GHz bands. The total reserve price for the spectrum has been set at £1.36 billion — but the U.K. Treasury has already factored £3.5 billion from the spectrum sale into its policy decisions, reports TechCrunch.

Currently, only Everything Everywhere offers LTE service in the U.K., using their refarmed 1800 MHz band. Competing mobile operators Telefónica UK (O2), Vodafone UK and 3 will be able to start playing catch-up with rival Everything Everywhere.

The bidding process for the extra spectrum will be conducted in secret. Companies taking part in the auction are:

  • Everything Everywhere: 27.2 million subs, owned by France Télécom aka Orange (50%) and Deutsche Telekom (50%).
  • PCCW, a major Hong Kong telecoms conglomerate, operating through its subsidiary HKT
  • 3: 8.2 million subs, owned by Hong Kong-based Hutchison Whampoa
  • MLL Telecom, a telecom network supplier founded in 1992 and based in Marlow, Buckinghamshire
  • BT, via its subsidiary Niche Spectrum Ventures
  • O2: 22.3 million subs, owned by Telefónica, a Spanish broadband and telecommunications provider
  • Vodafone: 19.2 million subs, owned by Vodafone, headquartered in London.

The seven parties are bidding for 28 lots of spectrum in the 800-MHz and 2.6-GHz bands. In total there is 250 MHz of spectrum up for grabs, compared with the 333 MHz already in use in the U.K.

The UK has decided to break the 190 MHz-wide band of 2.6 GHz frequencies into two groups, 140 MHz of paired frequencies and 70 MHz of unpaired.

The winners won’t be named for a “number of weeks”, and no updates on bidding activity will be provided during the process so that bids remain confidential to reduce the risk of strategic bidding distorting the outcome.

Once the winners are determined, and fees are paid, licences will be granted — with carriers then able to start rolling out new 4G networks. Ofcom is expecting that services will be launched by a range of providers from late spring/summer 2013.

Global LTE subscribers will pass 100 million in 2013, according to IHS iSuppli, more than doubling the 2012 numbers, and hitting 198 million by the end of 2013.

By 2016, LTE will claim more than 1.0 billion users, as shown in the figure above, equivalent to a five-year compound annual growth rate of 139 percent.

According to Wireless Intelligence, the five largest mobile operators in the world are China Mobile, Vodafone, América Móvil, Telefónica, and Bharti Airtel. They all have over 200 million subscribers each, about twice the size of AT&T or Verizon Wireless in the United States.

Related Dailywireless articles include; UK Gets 7 Qualified 4G Bidders, UK Begins 800/2.6GHz Auction Process, Joint LTE Network in UK Planned by Vodafone and Telefónica, UK Spectrum Auction: Delayed Again?, UK Spectrum Auction: Legal Threat from 02UK?, UK Delays 4G Auction, Ofcom: White Spaces by 2013, UK Gets Free Public WiFi, Europe’s Digital Divide Auction, German 4G Auction: It’s Done, Auctions Winding Down in Germany & India,

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