UK regulator warns of potential 4G auction delay

LONDON Tue Sep 6, 2011 10:25am EDT

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LONDON (Reuters) - Regulator Ofcom said the auction of Britain's next-generation 4G mobile phone spectrum could be pushed back at least three months to the second quarter of 2012, as it grapples with complex technical and legal issues.

Ofcom had originally targeted the first quarter of 2012 for the start of the auction.

A spokesman said on Tuesday: "Ofcom has been explicit in its aim to begin the 4G auction as soon as is practicable and this remains our objective.

"We are aiming to hold the auction in the first half of next year. However, we have always maintained it is an ambitious timescale."

Britain is imposing strict rules on the amount of 4G spectrum mobile operators can buy in a bid to protect the smallest operator -- Hutchison Whampoa's 3 -- and ensure competition in the roll-out of fast internet access.

Britain's biggest mobile operator is Everything Everywhere, a joint venture of France Telecom's Orange and Deutsche Telekom's T-Mobile, followed by Telefonica's O2, which made a veiled threat to launch legal action over the auction proposals, and Vodafone.

Delaying the process hinders 3 because the three largest players have spare spectrum that they can reallocate from basic voice calls to fast-growing data traffic.

Ofcom said allocating the spectrum was a complex area, and a large number of technical and competition issues had to be resolved before proposals were finalized.

"We note that because these technical issues need to be resolved before networks can be built, it will not be possible for mobile operators to start rolling-out 4G networks until 2013 at the earliest, regardless of when the auction takes place," the spokesman said.

(Reporting by Paul Sandle; Editing by David Hulmes)

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