Britain plans mobile spectrum auctions in 2012

Britain plans to auction more radio spectrum in 2012 to mobile telecoms operators who need it to handle increasing amounts of data traffic, communications regulator Ofcom said in a draft annual plan on Friday.

So far Germany is the only European country to have auctioned off the spectrum that has been freed up by broadcasters switching from analogue to digital transmission, raising 4.4 bn euros (USD 5.8 bn) last year. The European Union, seeking to boost cross-border trade and create jobs, has said EU countries should release spectrum to mobile operators by 2013 to spur consumer demand. The use of mobile Internet services such as browsing, email and the updating of social networks has exploded in the last three years, leaving operators struggling to satisfy demand. Ofcom said it aimed to start the auction of licences for 800 MHz and 2.6 GHz bands by the end of its 2011/12 financial year, which runs until end-March 2012, or early in 2012/13, and to issue the licences in the first half of 2012/13. The 800 MHz band previously used by broadcasters is particularly suitable for mobile broadband. Auctions have already been held in several European countries for the 2.6 GHz band, which is suitable for next-generation mobile networks using LTE or WiMax technologies. On Thursday Ofcom said it would allow airwaves currently used for second-generation (2G) services -- mainly voice calls and texting -- to be used for third-generation (3G) mobile broadband services too. Britain's smallest operator, Hutchison Whampoa's Three UK, which has a 3G-only network, complained about the move, saying it gave an unfair advantage to 2G incumbents. Three had hoped the so-called refarming of 2G would be linked to the spectrum auction, or that the government would have auctioned or reallocated the existing 2G frequencies, to ensure a more level playing field. Britain's biggest mobile operator is Everything Everywhere, a joint venture of Orange and Deutsche Telekom's T-Mobile, followed by Vodafone and Telefonica's O2. Telecoms operators in Europe spent over USD 100 bn for 3G licences in 2000 -- 22 bn pounds (USD 34 bn) in Britain alone -- in a rush to build networks for services that turned out to be slow to materialise. The coming round of auctions is expected to raise far less. Ofcom will consult on its draft plan until March 1 with a view to publishing its actual plan for 2011/12 in April.