UK faces £1bn bill for delayed 4G spectrum auction
Delays to the 4G spectrum auction have cost British businesses £732m a year, and the latest three to six month delay will add between £183m and £366m, a policy think-tank says.
Open Digital, an independent policy think-tank, said the UK was losing competitive ground to a host of European and other countries that have already allocated 4G spectrum.
The extra speed offered by 4G could save 37 million business hours worth £732m a year, Open Digital calculated.
The UK was four years behind the Nordic countries and three years behind the US in 4G roll-outs, the think-tank said. This has allowed their businesses to save time and money by using high speed mobile broadband to do business and develop new businesses.
“Visitors to Britain will first notice London’s lack of 4G mobile data when they arrive for the Olympics next year,” said James Firth, report co-author and CEO of Open Digital.
Several industry observers, including Three CEO David Dyson, have warned that UK’s mobile networks will run out of capacity by the Olympics. Last week O2 said it was spending £50m to boost capacity for the Olympics.
Firth welcomed the £150m extra for rural mobile roll-out promised today by the chancellor, George Osborne. Osborne said this would help the country to expand mobile coverage from 95% to 99%.
But Firth noted that the auction for 4G spectrum (800MHz and 2.6GHz) was not expected until mid-2012, and for network build to start only in 2013,and not finish until 2017.
“4G has significant advantages – better spectral efficiency so you can cram more bandwidth in the same amount of spectrum and far less noticeable performance penalty when you’re a few miles from the transmitter, so rural ‘fringe’ communities should see far faster mobile broadband.
“But the auctions for 4G spectrum are yet to be held, so it’s probably a good second-best to widen the 3.5G coverage now, while we’re waiting for 4G,” Firth said.
The on-going lack of 4G has meant UK businesses has not been able to take full advantage of new technologies such as cloud computing, he said.
Firth called on Ofcom to adopt more ambitious 4G roll-out targets and for the government to acknowledge the massive benefit to the economy from 4G mobile data.