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4G Auction: Seven Firms To Compete For Space

(c) Sky News 2012

There will be two relative strangers to mobile users among the firms bidding in next year's 4G auction.

Ofcom announced there would be seven companies competing for space in what will be the biggest ever sale of the UK's mobile airwaves.

The regulator said the auction, which kicks off in January, will herald "better, faster and more reliable mobile broadband connections" for consumers across the UK.

EE, which was formed from the merger of Orange and T-Mobile, already has access to 4G and was the first to offer a 4G network in the UK by using old 2G capacity, but is bidding for more space.

Vodafone (LSE: VOD.L - news) , Hutchison 3G and O2 parent firm Telefonica will also be competing while it is understood that BT (LSE: BT-A.L - news) is more interested in bolstering its wi-fi services than in becoming a major mobile phone player.

The intentions of PCCW (HKSE: 0008.HK - news) , which owns Hong Kong Telecom, and UK network supplier MLL Telecom are less clear but MLL confirmed that its interest was limited to one of supporting mobile firms rather than becoming an operator itself.

Ofcom said the auction, which kicks off next month, will herald "better, faster and more reliable mobile broadband connections" for consumers across the UK.

Its chief executive Ed Richards said: "The 4G auction will be a competitive process that will dictate the shape of the UK mobile phone market for the next decade and beyond."

It is expected to raise up to £3.5bn for the Treasury.

The bidders will be competing to buy airwaves in two separate bands - higher frequency 2.6 GHz and lower frequency 800 MHz - with around 28 lots of spectrum up for grabs in total.

Experts suggest that, for the typical user, download speeds of initial 4G networks will be at least five to seven times faster than those for existing 3G networks.

This means a music album that takes 20 minutes to download on a 3G phone will take just over three minutes on 4G.

4G is also expected to revolutionise other high-bandwidth data services such as streaming high-quality video or watching live TV.

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