About a year ago we brought you the full lowdown on what 4G is, how it works, and when it’ll be coming to the UK.
So what’s happened over the last 12 months? Where are our 4G handsets? And when will we actually have 4G networks up and running? We’ve spoken to the industry experts for an update, and we have to warn you, there’s a lot of squabbling going on…
A lot has happened since we last went in-depth on 4G in the UK. Some operators have carried out trials to test the technology and see just how it works. Apple tried to market its latest iPad as 4G – even though it couldn’t use the available spectrum in some countries – and was criticised and had to offer refunds for doing so. And one network has said it’s ready to launch 4G before the end of this year, if Ofcom will let it, with the others crying foul, saying letting one go first would give it an unfair advantage.
To top it all, the auction that we need to kick everything off has just been delayed until the beginning of next year.
It’s a thorny old business, launching a new generation of mobiles, as we’ll see. But before we get to the tribulations, let’s start with the trials.
The good news is that 4G trials have been taking place in the UK. Everything Everywhere and BT Wholesale kicked off the first 4G live trial in Cornwall, in October last year. Two hundred lucky customers in St Newlyn East and the surrounding South Newquay area were kitted out with LTE tech. Considering the area previously had little or no broadband, it was quite a step change.
It was deployed to both mobile and fixed-line customers, meaning they could experience blazingly fast speeds at home or out and about. While theoretically capable of reaching 150-160Mbps, more realistically they’ll have got between 5-10Mbps. (Strictly speaking LTE isn’t 4G, but it’s a step-up, so we’ll not quibble here. For more on the definition of what classifies as 4G, see the piece last year.)
The trial was extended until this summer.
But Everything Everywhere isn’t the only one to have been running trials. Just a month after the Cornwall exercise, O2 started its own 4G (LTE) trial in London. It’ll last until August, and involves hundreds of customers and businesses in 25 sites in the capital. O2′s trial uses the 2.6GHz spectrum, which is more suited for urban areas, whereas Everything Everywhere’s used the 800MHz. O2′s is on a bigger scale too, involving more than 1,000 people.
By all accounts, the trials have been a success, with vastly improved browsing and download speeds. So why isn’t 4G here right now? Well it’s not a problem of technology. Rather, it’s the people surrounding it, and the politics at play.
We covered what Ofcom is doing in last year’s piece, but here’s a quick recap: the regulator is going to auction off the 800MHz and 2.6GHz bands to the various networks. Because of the size difference between the networks, it wants to ensure everyone has a fair crack of the whip, and no one gets an unfair advantage. As such, things are taking some time.
Just this week, Ofcom announced the spectrum auction would take place early in 2013. It originally said it would hold the auction at the beginning of 2012, then put that back to the end of 2012, so this latest delay wasn’t a huge surprise to anyone.
Making sure all the networks have an equal chance is no easy task. “All the operators are at different starting points, so Ofcom has a tricky balancing act to pull off,” says Matthew Howett, an analyst at Ovum. “For example, Three have no spectrum at the moment other than the 3G at 2.1GHz.”
And all the operators are after the holy grail, the 800MHz spectrum. “Deploying a network in the higher spectrum bands is quite expensive because you need a lot of base stations in order to get good coverage, because the frequencies don’t travel as far,” Howett continues. “So the operators are keen to get some of the lower value frequencies like the 800, in order to roll out a nationwide network in a cost-effective way.”
Because of its small size, Three is in a particularly dicey position. According to Howett, Vodafone and O2 would like the auction to go ahead with relatively few rules, which could risk Three not getting any spectrum. And if that happened, Three wouldn’t be able to compete, and would effectively have to shut up shop. Whereas the other operators already have spectrum below 1GHz, so even if they didn’t acquire the 800 in the auction, they could still roll out a network using their existing spectrum. It wouldn’t be as good, but it’d be something.
The thing is, Ofcom likes Three because of its disruptive nature, and the fact it offers cheaper deals and keeps things competitive, so it wants to ensure there are four operators offering 4G. (One of them doesn’t necessarily have to be Three, but an operator like it that offers good deals to consumers.) The others are annoyed, and see it as protectionism of the smallest operator, but there’s not much they can do, short of mounting a legal challenge. And that would be bad news for us all.
“If they do legally challenge, then we’re back to the drawing board, and it’ll take another couple of years before we even get round to starting an auction,” Howett says.
But let’s stay optimistic, eh? Once the auction has taken place, we should be well on our way towards these fast speeds we’ve been hearing so much about.
“I think the actual rollout will begin not long after the licence has been awarded,” says Kester Mann, an analyst at CCS Insight. “The commercial services should launch towards the end of next year. So we’re looking maybe more into 2014 before more widespread commercial launches happen.”
Encouraging, but still way behind a lot of countries. “For such a developed market, the UK is one of the furthest behind,” Mann says. “About 80 networks are live according to the GSA – that includes some of the more mature markets in western Europe, but some of the smaller more emerging markets as well. So that puts things into perspective.”
Everything Everywhere: Ready to launch now
As we say, it’s not the technology holding everything up. Everything Everywhere wants to launch before the end of the year using its 1,800MHz spectrum; Ofcom initially gave this the green light, then was inundated by complaints from the other networks saying Everything Everywhere would have an unfair advantage.
Howett explains: “What makes things more complicated is that Everything Everywhere has asked Ofcom if they could launch 4G today using the 1800MHz spectrum that they’ve already got. The European Commission told Ofcom they should allow this. But Ofcom asked everyone else what they think, and as soon as they did that, O2, Vodafone and Three all said, ‘Don’t be ridiculous, there’s no way Everything Everywhere can launch ahead of us. They would get such a huge advantage, it just can’t go ahead.’ So Ofcom is now reconsidering.
“So you’ve got one operator saying let’s give Britain 4G, and the others are crying foul. And Ofcom has to resolve it.”
This is a whole separate issue aside from the auction, and is proving quite a spanner in the works.
“[Everything Everywhere] say their position as the largest operator in the UK means they should be leading, and should be doing as much as they can to encourage the development of LTE and 4G in the UK,” Mann says. “We think that’s very laudable to try and push 4G, but also that it would give them a very strong advantage in terms of marketing their network, and educating their customers.”
We’re expecting a decision from Ofcom in the next month or two.
If it was allowed to go first, not only would Everything Everywhere have a huge head start, it would have the highly desirable 1,800MHz spectrum, too.
“Operators quite like this 1,800 band, because it sits between the 800MHz and the 2.6GHz, which are two bands Ofcom are awarding for 4G,” Howett says. “And it offers a good combination of the two characteristics of the lower value spectrum, which is great for coverage, and the 2.6, which is great for speed and capacity, and for cities.
“So Everything Everywhere has this big sweet spot of spectrum which everyone is now focussing their attention on. No one else has anywhere near a same holding at 1,800, so can’t do this.” So Everything Everywhere really is in a prime position.
We contacted all the networks for this piece. They all declined to comment, except for Everything Everywhere.
“We’ll be ready to launch 4G on a small scale this year,” a spokesperson from Everything Everywhere tells me. “It would be in a number of different locations, which for commercial reasons I can’t reveal right now. It would be more than Cumbria, more than Cornwall [where the 4G trials were held]. It wouldn’t be widespread across the country, but it would be certain locations… We’d be absolutely ready to do so before the end of the year.
“Our position is: Why are we waiting for the auction? Let’s look for ways to use our 1,800 [spectrum], let’s put in a request to the handset manufacturers to produce devices and dongles that’ll run on the 1,800, and let’s build the network to make that happen, rather than fall further behind for however long. There are 40 countries with 4G, and we’re not one of them.”
Everything Everywhere has gone all out, launching a 4G Britain initiative trying to kick start the rollout. So how does it respond to criticisms it’ll have an unfair advantage over the other networks?
“There was a massive flurry of interjections [over EE wanting to launch first] from Vodafone and O2 and Three when we announced the 4G Britain initiative,” the spokesperson says. “They all said it was unfair and it gave us a commercial advantage. But then I spoke to the network guys who said had it fitted into their strategy to do this, they would also be in a position to launch 4G, because they had some spare 900MHz spectrum which they decided to invest in HSPA+. Vodafone and O2 say there’s no ecosystem and no devices, but equally there’s no ecosystem for 1,800MHz, and Samsung and Huawei and so on have all said to us ‘You guys have such massive global buying power, tell us what you want and we will give you those devices.’ So had they built this in [to their plans] a year ago when we started to do it, they’d also be in a position to launch 4G on a small scale.
“So our response to any questions is Ask them why they haven’t bothered to do it,” the spokesperson continues. “And I think the answer will probably be, from what I gather, is that it costs an awful lot to get 4G up and running… So it could be they weren’t interested in putting that extra investment towards 4G, they’d rather sit and sweat the assets for 3G.
“I think it’s a bit much for them to dig their heels in over 4G and say we’re creating a monopoly. It’s just they’ve chosen 3G over 4G.”
The spokesperson was keen to point out Everything Everywhere will have to sell a quarter of its 1,800MHz spectrum to comply with European competition rules; and that it has 28 million customers, so it needs all the spectrum it can get.
Everything Everywhere argues that rolling out 4G would spur everyone into action. “Let’s kick off, stop faffing around and get the investment going, because as soon as one operator does it everyone will leap to it,” the spokesperson says. “I don’t believe the auction alone will spur people into putting £5.5 billion of investment in. Someone needs to get things going.”
How we got here
So as things stand, we’re in a bit of a minefield, as you can see. But how did we get here? And how did we fall so far behind so many countries? We were the first in the world to auction off the 3G spectrum back in 2000, after all.
Howett explains: “All the other European countries had to liberalise the spectrum due to an order from the European Commission, and when they did they looked at how much spectrum each had, and rejigged it so it was similar, so the decision was good for everyone, and it could go to auction in a clean way. But when Ofcom proposed taking back some spectrum from the operators [to do the same], the operators immediately legally challenged that. Ofcom got scared, and asked the government to fix it.
“By unfortunate timing, this all happened during the change of government. And it was just dropped from the agenda as there were bigger issues out there. So we didn’t reorganise the spectrum holdings like everyone else. Ofcom is trying to do that with the auction. And it’s just become horrendously complicated, with so many things dependent on each other.
“Unfortunately the person responsible is Jeremy Hunt, and he’s had quite a lot on his plate.
“I don’t think Ofcom are ultimately to blame. I think the government should’ve fixed it when Ofcom asked them to.”
The fact we’re an incredibly litigious nation doesn’t help.
“All the operators legally challenge everything Ofcom does,” Howett says, “so it’s got to the point where Ofcom are afraid to speak. They spend twice as long trying to make everything watertight so they know they can win if challenged. If they didn’t have to do all of that, maybe it could all happen a bit quicker.”
Add to this the recent economic situation, and you’ve got a perfect storm of delaying factors.
“It’s not a great time anyway for the operators to be spending billions of pounds on new licences because of the financial situation,” Howett says. “A cynic would say it’s actually suited some of the operators quite well not having to spend money on rolling out 4G right now. Any delay could actually be in their interests.”