The UK’s biggest mobile operators have smashed expectations by spending almost £1.4bn in the race to secure spectrum to launch next-generation 5G services.
BT-owned EE, Vodafone, O2 and Three have paid close to double what many City analysts had expected Ofcom’s auction to raise, as the mobile operators seek to open up a world of internet-connected world of driverless cars, smart home appliances, delivery drones and superfast video on the go.
City analysts had a wide range of predictions on what the auction would net the government – spanning £630m to £1bn – with the attractiveness of 5G services to consumers and mobile operators proving much more valuable.
“Mobile network operators are willing to dig deep to acquire 5G spectrum – evidently seeing it as a strategic necessity,” said Dhananjay Mirchandani, a telecoms analyst at Bernstein.
The big four operators have secured broadly the same amount of 5G spectrum to use after the auction.
Vodafone won 50MHz of the 3.4GHz auctioned paying £378m, BT-owned EE won 40Mhz paying £303m, Telefónica-owned O2 picked up 40MHz for £318m, and Hutchison-owned Three spent £151m on 20Mhz. Three UK had already secured a 40Mhz of 5G spectrum prior to the auction.
5G is set to be rolled out in the UK in the next decade and the mass connectivity it allows will help expand the so-called internet of things (IoT), in which appliances and devices wirelessly connect to the internet and each other.
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