UK 4G LTE spectrum auction attracts new players, but will a new mobile network follow?

UK communications regulator Ofcom has announced there will be seven companies taking part in its 4G LTE spectrum auction next year, where alongside the usual suspects, a couple of new names have appeared. Does this indicate a new mobile network is on its way?

At the beginning of next year, UK mobile network regulator Ofcom will auction off chunks of the 800MHz and 2.6GHz spectrum, ready for use with a nationwide 4G LTE network. The auction is the culmination of a long and arduous process, which has seen the sale of the spectrum suffer from several delays, during which time EE has launched its own 4G LTE service, but using re-farmed 1800MHz spectrum from its 2G service.

Ofcom has now announced the list of companies accepted into the auction, each of which had to submit an application along with a deposit of £100,000 ($160,000). They are: Vodafone, Telefonica UK, Hutchison 3G UK, Everything Everywhere, PCCW Limited as HKT UK, British Telecom as Niche Spectrum Ventures, and finally, MLL Telecom.

While Vodafone will be a familiar enough name, the others may need some explaining. Telefonica UK is the Spanish firm which owns the O2 network, and Hutchison 3G UK owns Three. Everything Everywhere is also known as EE (who obviously feels one can never have enough 4G spectrum) and operates as both Orange and T-Mobile. British Telecom will be joining in too, and is apparently looking to acquire some 2.6GHz spectrum, which it will use to improve its public Wi-Fi network.

PCCW and MLL Telecom

This leaves us with PCCW Limited and MLL Telecom, both of which are likely to be unfamiliar to those outside the industry. So what are their plans, are we about to see a new mobile network launched in the UK? PCCW is a telecoms company from Hong Kong, who way back in June 2011 told the Financial Times it was, “Preparing to build a mobile broadband network in the UK.” This came about in February 2012, but in only a few cities and as an alternative to fixed broadband networks rather than a fully-fledged mobile network.

Additionally, the FT report said PCCW was talking to several of the smaller operators in the UK, possibly discussing renting space on a 4G network operated by the conglomerate. This could give networks such as Virgin and GiffGaff quick access to high speed data – essential if they still want to compete later next year. Sadly, nothing has been announced since then so this may not become reality, potentially leaving Mobile Virtual Network Operators with no option other than to negotiate new deals with their big-name partners.

As for MLL Telecom, it manages business networks in the UK, and has recently won a contract to provide high-speed wireless broadband to a local council in London. At the time, one of its directors talked about the competitive packages it offers using its own spectrum, suggesting it’s taking part in Ofcom’s auction because it wants to grab some more for future business projects.

If PCCW doesn’t end up making a deal with UK MVNO networks, it looks like Ofcom’s auction won’t be adding any new names for the consumer to consider when 4G is switched on in 2013, barring any surprise announcements. The auction is scheduled for January and is expected to net at least £1.3 billion, based on the reserve prices, with the winners to be announced in February.