LONDON -(Dow Jones)- UK telecommunications regulator Ofcom has unveiled proposals for the auction of its 2.6 GHz radio spectrum on Monday, which could be used to offer mobile phone and wireless internet services.
According to one analyst, the auction could see new telecommunications operators enter the UK market.
The proposed auctions - which could spark the UK's biggest single radio spectrum selloff - would make three spectrum bands available to operators and consequently could be used for mobile broadband services, such as high-speed, long-distance WiMAX internet, and mobile television services.
A spokesman for Ofcom said that, depending on how lengthy the industry-wide consultation process takes, auctions could begin at the end of 2007.
Ofcom's Chief Executive Ed Richards said: "Releasing more spectrum to the market will create new opportunities for innovation in wireless technologies, promoting competition and driving convergence."
Still, ING analyst Damien Chew said the auctions are unlikely to spark the same "massive bids" seen when the licenses for UK 3G radio-spectrum were sold-off at the peak of the dot-com boom. During that period five operators collectively paid more than GBP23 billion for the right to build and market third-generation mobile phone networks.
"It's unlikely that we will see a repeat of that," said Chew. "A lot of the hype has come out of the market, and it would be hard to justify why anyone would pay a massive amount of money like that when you look at the business models out there."
Chew added that, depending on how aggressive the auctions became, several new operators could enter the U.K. market to offer WiMax voice and data services.
BT Group, which is the only major European telecommunications operator lacking its own mobile-phone network, said it was interested in the potential of the 2.6 GHz spectrum. But said it didn't envisage a repeat performance of the original 3G auctions, when its then BT Cellnet division bid about GBP10 billion acquiring licenses across Europe.
Laden with debt, BT subsequently demerged Cellnet to form O2, a mobile operator which was then bought by Telefonica.
"We are naturally interested in the potential of this spectrum and we continue to assess its possible uses, including the possibility of WiMAX," said BT in a statement.
"However, this technology is still in the early stages of development and we expect it will be a few years before it matures."
Company Web site: http://www.ofcom.org
-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 11th December 2006
Posted to: www.cellular-news.com/story/20888.php