4G auction results: Industry weighs up end user benefits

News 20 Feb, 2013

Comms industry watchers ponder consumer benefits of 4G auction results.

The results of the Ofcom 4G spectrum auction were announced earlier today, generating £2.34 billion for the economy, as mobile operators Vodafone, BT, EE, 02 and Three emerged as winners.

However, the funds fell short of the £3.5 billion the Government predicted the auction would generate, sparking debate among industry watchers about what went wrong.

"The disappointing revenues from the 4G auction are a reflection of the challenges that mobile operators face in growing revenues from their users in the social media age," said Victor Basta, managing director of financial experts, Magister Advisors.

Basta said mobile operators have adjusted their business models to support the social networking habits of end users, but are failing to reap any commercial benefits.

"Social networking has effectively turning mobile network operators into digital drug mules,” he added.

Meanwhile, Allen Scott, UK country manager for F-Secure, said - although the Government may not be satisfied with the amount raised by the auction - the wider availability of 4G services is sure to have a positive impact on the economy.

"For consumers it means true content-on-demand, achieving widespread coverage and the ability to cope with more demanding services," Scott continued.

"With further operators entering the 4G market, competition will become tougher and drive down the costs of 4G services for consumers.

“As such our lives will become truly cloud-centric, with the realisation of personal content that is available wherever, whenever and on any device," he added.

Ernest Doku, telecoms expert at utilities comparison site uSwitch.com, backed Allen’s view that greater competition in the 4G market would be a good thing for consumers.

"Consumers will be hoping for a race to the bottom on pricing - especially following Three’s pledge to not charge a premium for 4G - but factoring in the cost of a new superfast handset should be considered when making the leap to 4G," he added.