Peace deal between mobile companies heralds nationwide 4G coverage on multiple networks six months early
The UK will have nationwide 4G services running on multiple networks by the end of next summer – six months earlier than originally proposed – under a deal sealed in a meeting between the networks and culture secretary Maria Miller on Tuesday night.
The agreement will shorten the headstart won by EE, the largest network company and parent of Orange and T-Mobile, which intends to launch the country’s first 4G service later this month.
So-called "fourth generation" mobile technology allows much faster internet connections for phones than today’s 3G networks. With the iPhone 5 and high-end smartphones from Nokia and Samsung designed for some British 4G spectrum bands, operators are now racing to build the networks capable of running them at full speed – which will allow users to download movies in seconds and make high quality video calls.
EE already owns enough spare spectrum to be able to launch this year, while its rivals O2, Vodafone and Three must wait for a government airwaves auction to acquire enough bandwidth for 4G.
In an 11-page letter sent to Miller on Monday night, telecoms regulator Ofcom offered to bring forward both the auction date and the deadline for clearing the spectrum being sold from digital TV signals so they are free to carry mobile phone traffic.
The heads of the UK networks agreed a peace treaty on Tuesday night after months of legal wrangling.
"Delivering 4G quickly is a key part of our economic growth strategy," said Miller. " I am grateful to the mobile operators for their co-operation in bringing forward vital 4G services. The open and collaborative approach taken between the government and the mobile companies will have hugely beneficial results for UK business and investment. We anticipate that 4G services will boost the UK’s economy by around £2-3bn."
O2′s UK chief executive, Ronan Dunne, said that after intensive lobbyingthe auction would begin in January instead of February or March. It is expected to bring in up to £4bn for the government’s coffers.
Dunne added that masts company Arqiva would be able to clear away digital TV signals in England, Wales and most areas of Scotland by May, with networks able to launch services by the end of the summer after around two months of testing. However, the harder to reach Highlands and Islands will have to wait longer for 4G, with services not expected until later in 2013.
The UK’s 4G auction has suffered from repeated delays after a combination of legal threats from phone companies and a mix-up over digital TV signals. UK digital channels launched on a different band to the rest of Europe and Arqiva is now rushing to harmonise them in line with the continent.
Dozens of other nations including Germany, the US and even smaller economies like Estonia already have 4G, putting the UK in danger of losing its reputation as a pioneer in mobile technology.
In a presentation which laid part of the blame for the slow progress at Ofcom’s door, Dunne said: "Everyone is pleased that we’ve made this progress, it’s just a little bit frustrating that it’s taken so long. Before our various interventions we didn’t have a genuine level playing field and we risked a 4G digital divide."
But the regulator denied that it was to blame.
Ofcom’s chief executive, Ed Richards, said: "The actions we have taken with industry and government avoids the risk of significant delay and is tremendous news for consumers who might otherwise have waited a considerable period for the next generation of mobile broadband services. Ofcom’s objective has always been to release the spectrum as early as possible and we remain focused on starting the auction by the end of the year."
All operators have now agreed not to litigate either EE or the 4G auction. It is understood that the EE chief executive, Olaf Swantee, has promised not to hold up the work of Mitco, a jointly owned company charged with clearing the spectrum for mobile use over the coming months.
Shadow chancellor Ed Balls has said he will spend the proceeds on building affordable homes and a stamp duty holiday if Labour is elected.
Responding to Balls’s plans, announced at his keynote Labour party conference speech on Monday, Dunne said: "It would have been nice to have had an auction before somebody actually went and spent the proceeds."
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