4G in the UK: Why the slow start on superfast wireless?
While the UK has only has one operator currently offering limited 4G services, it's been a long, hard road to get even that far.
For most of the UK's mobile operators, 4G rollouts remain months away - spectrum suitable for 4G LTE services was only auctioned off last month. EE, however, was able to get the drop on its rivals, launching its 4G service late last year by refarming existing spectrum. It rolled-out LTE coverage to 10 UK towns and cities in October 2012, and added another six before the year closed.
The operator is now planning to deliver 4G to 17 more towns and cities before March this year, and expects 70 percent of the British population to be covered by the end of 2013, rising to 98 percent the year after.
EE's current 4G device offerings are the usual 4G suspects: the BlackBerry Z10, Nokia's Lumia 820 and 920, Samsung's Galaxy SIII LTE and Note 2 LTE, Huawei Ascend P1 LTE, HTC's One SV LTE and One XL, and the iPhone 5. (The iPhone 5 supports 1800Mhz, the spectrum band that EE's 4G network runs on.)
The cost of 4G
Would-be early adopters will need to dig deep for their 4G: EE's standard post-paid tariffs start at £31 a month for a package with 500MB of data, up to £56 a month with 8GB (all are on two-year contracts with unlimited texts and UK call minutes). In January, the operator added an extra package aimed at "super users", which it said make up less than one percent of its 4G customers, with a 20GB data allowance for £61 a month with a handset, unlimited calls and texts on a 24-month plan.
There are also SIM-only plans available, from £21 with 500MB of data to £41 with 8GB, all on a one-year contract. The super user 20GB plan is also available as a SIM-only package for £46 a month over 12 months.
For those just wanting data-only packages, monthly tariffs vary from 1GB to 8GB on plans that last between 18 and 24 months. The cheapest monthly package comes in at £15.99, the most expensive £25.99, although some of the least expensive plans also come with a charge for a Huawei dongle.
And what sort of speeds can EE customers expect with their 4G tariff? EE has said it's aiming to deliver a download speeds consistently between 8Mbps to 12 Mbps, although ZDNet's own tests, conducted shortly after the service launched, showed results varying between 5Mbps and 20Mbps.
For those wanting a 4G alternative to EE, there's only other one option currently available - a company called UK Broadband. However, the service is not widespread – it's only available in Swindon, Reading and the Southwark area of London – and pitched as a replacement for home broadband. Prices range from £21.50 per month over 24 months for a light-use package, up to £40 a month for a heavier use package, able to cope with home working and TV viewing, with no fixed contract.
However, for those wanting 4G packages from a mobile operator that isn't EE, a wait of at least several months lies ahead following the conclusion last month of the UK's long-awaited spectrum auction.
The spectrum sale
Communications regulator Ofcom was unable to sell off the spectrum earlier as it was previously used for analogue television signals. However, with the digital switchover now complete and analogue TV signals now no more, the spectrum is free to be sold off.
The auction began in January, with EE, HKT – part of Hong Kong telecoms group PCCW, Three, managed networks provider MLL Telecom, BT subsidiary Niche Spectrum Ventures, O2 and Vodafone all signing up to compete for spectrum in the 800Mhz and 2.6Ghz bands.
Ofcom initially set reserve prices on each of the lots of between £15m and £225m, meaning the minimum the regulator expected the spectrum to bring in was £1.3bn. In the end, the total was £2.34bn – ahead of Ofcom's predictions, but noticeably below the £3.5bn the Chancellor factored in when working out the country's finances for his autumn statement. (And also way under the £22.5bn the 3G auctions brought in in 2000.)
Five operators each successfully secured tranches of 4G spectrum from the auction: Vodafone, O2, a subsidiary of BT, EE and Three.
The licences they've won will last potentially indefinitely – the minimum term that operators can hold the spectrum is 20 years. After that Ofcom can give five years notice before retaking it for spectrum management reasons.
Under the conditions of the auction, O2 – which won one of the 800Mhz lots - will have to ensure 98 percent of the UK population is covered by 4G by 2017. While not all the other operators will face the same obligation, Ofcom said it expects the move to "drive other operators to extend their own coverage in response".
The auction process has been a long, drawn-out one, being stopped and started since 2008. The first discussion of the auction process began in 2007, with plans to sell off 2.6GHz spectrum the following year. It was delayed again in 2009 after legal challenges from operators including O2. Come 2010, the auction was being scheduled in for mid-2011. By 2011, Ofcom began to set out the rules for the auction, with the intention it should go ahead in the start of 2012.
The auction saga
And that year, yes – you guessed it – the auction didn't go ahead, but the regulator did at last start to overcome the legal hurdles and challenges that had dogged it. In March, it issued revised auction proposals, which ditched an earlier plan to reserve a chunk of 800Mhz spectrum for operator EE, which it was hoped would assuage objections from rival operators. (The sub-1Ghz spectrum had been set aside to ensure all major operators had spectrum that was suited to travelling long distances and indoor coverage. Both O2 and Vodafone already own tranches of such spectrum.)
By October, Ofcom was so convinced there would be no more legal problems to derail the auction, it wrote to the secretary of state for culture, media and sport to say just that.
And so far, it appears to have been proved right. With the spectrum auction now complete, there are hopes that EE's rivals can have their own 4G LTE services online from this summer.
Now the operators have their slices of spectrum under their belt, they'll need to take care of those homes that lose their TV signals as a result. A £180m government scheme will give out filters to homes that suffer interference with their terrestrial TV signal, with a further cash pot available to premises whose signal isn't restored by the filter to help find an alternative way around the problem, such as switching to cable for TV services.
While operator three has publicly said it's in no rush to bring out 4G services, others appear to be gearing up: Vodafone, for example, is advertising the Z10 on its network as '4G ready'.
It's perhaps not surprising that operators aren't rushing to deploy 4G, if EE's recent quarterly results are anything to go by. The operator didn't publish any details on how many new subscribers had signed up to 4G, or how many existing users had switched from 3G to 4G – suggesting that numbers are unlikely to be stellar, despite drafting Kevin Bacon in to flog the service.
The UK 4G market now finds itself in something of a transitional phase: one operator with 4G services live but finding little takeup, five others in no hurry to launch their own services, including one new entrant to the market. 2013 was supposed to be the year that 4G really took off, but if EE customers lack of enthusiasm for LTE and other operators' reticence is any indication, it may be some time before the UK is a 4G nation.