UK’s 4G spectrum auction is now under way with seven bidders who are competing to acquire new LTE frequencies. The bidders are Everything Everywhere,  HKT (UK) Company, Hutchison 3G UK, MLL Telecom, Niche Spectrum Ventures (a subsidiary of BT Group plc), Telefónica UK, and Vodafone.

Bidders will be competing for 28 lots of spectrum in two separate bands – 800 MHz and 2.6 GHz. The lower frequency 800 MHz band is ideal for widespread mobile coverage. The higher frequency 2.6 GHz band is ideal for delivering the capacity needed for faster speeds. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today. Both bands are being packaged into smaller lots of spectrum for the auction.

The new spectrum will almost double the amount of spectrum currently available for mobile broadband services on smartphones, tablets and laptops. In order to maintain competition in UKmarket, regulator Ofcom has designed the auction to ensure that at least four different operators have sufficient spectrum to be credible national 4G wholesalers.

Once fees are paid, licenses will be granted, enabling operators to start rolling out new networks. It is expected that services will be launched by a range of providers from late spring / summer 2013.

Bids are being placed online over secure connections, using software that has been developed specifically for the auction. The bidding will continue over several rounds and is expected to take a number of weeks until the final winners are known. In the current stage of the auction (the clock stage), at the start of each round Ofcom announces a price for each lot and each bidder then specifies what combination of lots they would most like to win at those prices. In each subsequent round Ofcom increases the prices for lots that have excess demand, until eventually demand matches supply. At this point the clock stage ends.