Auctions of spectrum – the frequencies used to carry data signals used by TVs and mobile phones – are big business. Although this time, the government will presumably price its auction more carefully: before the 4G auction George Osborne told anyone who would listen that it would raise £3.5bn, but in the even he only ended up making £2.3bn. Cue smug jibes from the Labour benches.
The 3G auction before that (way back in 2000) was similarly badly managed: it may have made the government a whopping £22.47bn, but that was money telecoms companies could have been spending on phone masts. That, coupled with the fact that the 3G auction stipulated providers only had to cover 80% of the country, is the reason 3G coverage in the UK can be described as patchy at best.
At an event this morning, Ofcom chief exec Ed Richards said things are unlikely to improve for 3G uses, saying, basically, that people need to upgrade to 4G if they want decent coverage (4G coverage is expected to reach 98% of the UK by 2017).
But having got it so wrong twice, the hope is the government will take a more considered approach to its auction of the 5G spectrum.
The problem at the moment is that Ofgem reckons the demand for mobile data in 2030 will be 80 times greater than it is now. Just over a billion people are using 4G already, and Ofcom reckons the spectrum’s long-term value will hit £20bn eventually. Apparently, over the last five years, the value of Britain’s spectrum has risen by 25% in real terms.
One of the ways to ease pressure is using ‘white space’ technology that transmits data between unused parts of the spectrums used to carry data signals. Apparently, Microsoft and BT are among several companies that have begun separate trials of 5G technology.
In Glasgow, Microsoft is doing one of the first experiments in the world looking at technology that can transmit data between unused parts of the frequencies that use broadcast and digital TV. As part of the experiment it wants to set up a city-wide wifi hotspot. In Cambridge, BT and start-up Neul is running similar tests with technology that will monitor traffic congestion.
So it’s all go on the 5G front – as long as the government doesn’t mess it up this time.