What BT's planning with its 4G bid

 

Gallery

By Stewart Mitchell

Posted on 20 Dec 2012 at 12:49

BT has no plans to become a national mobile operator, despite bidding for part of the 4G spectrum in Ofcom's auction.

BT's interest in the spectrum – via a holding company called Niche Spectrum Ventures – was the most intriguing aspect of today's announcement that seven companies would be bidding for space to run mobile broadband services, but BT has said it does not plan on re-entering the mobile market.

The company has had no mobile presence in the UK since demerging from Cellnet, which was sold to Telfonica in 2005, and the company debunked any idea of reopening a network.

"The rules governing the auction are such that we can't say much at all as to any planned use of the spectrum," the company said in a statement sent to PC Pro. However, sources at BT reiterated earlier comments from BT boss Ian Livingston, where he said the company had no plans to be a national mobile operator.

Just because there are seven bidders doesn't mean there'll be seven companies holding licenses at the end of the process

According to analysts and industry experts, the logical conclusion is that BT will be looking to use any spectrum it wins in the auctions for 800MHz and 2.6GHz ranges to provide broadband access to homes in slow-spots such as rural areas, as well as to enterprise customers.

"BT was involved in 4G trials with EE down in Cornwall and that's all complete now and the same triallists were also involved in white space trials to see which technology worked best for end users," said Andrew Ferguson, network expert at Thinkbroadband.com.

"The assumption is that people seem to be happy that it does work, so it could be for those outlying areas where there are houses every mile or so rather than for clusters of homes."

Although such areas could have been covered with rival radio technologies with higher speeds, BT could turn 4G LTE into a form of fixed wireless by selling it with a housebound antenna.

"There is a capability with 4G LTE to use fixed antennas and you get better signals and higher speeds – maybe BT is envisaging a small antenna you stick on your window that's linked to a router indoors," said Ferguson.

Small-scale services

The government is hoping for a £3.5bn boost to its coffers from the auction, but more bidders could push up the overall revenue from the 250MHz of airwaves being made available.

Along with BT, managed services company MLL and fixed wireless broadband operator PCCW have also staked a claim.

Analysts believe those three surprise entrants will be looking for much smaller slices of spectrum than the incumbent network operators.

"There'd been speculation about a wildcard BT bid, but it's a bit of a surprise," said Thomas Wehmeier, telecoms analyst with Informa Telecoms & Media. "But the clue is in the name – Niche Spectrum Ventures – it's not going to go big on mobile. What it sees is the ability to use that for a more targeted approach, possibly for enterprise customers."

The other two companies that have bid are also likely to be seeking small slices of airwave allocation for similarly targeted services.

"MLL is a small managed-services provider, while PCCW owns UK Broadband and will be looking to acquire spectrum, not to be a national player - but it's a chance to be a niche provider in certain segments and maybe create some interesting offers," Wehmeier said.

Despite the three wildcards likely bidding for smaller slices of spectrum, they may still be disappointed when the hammer falls.

"They are likely to be interested in chunks of spectrum that won't be going against the incumbents, but I wouldn't be surprised to see at least one of them ending up with nothing, particularly if bidding prices them out of it," Wehmeier said. "Just because there are seven bidders doesn't mean there'll be seven companies holding licenses at the end of the process."