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4G or not to 4G? Now we know the answer

22/02/2013

It’s been a big week for 4G and it all started with a set of financial results. EE announced theirs on Tuesday and despite the coup of being the first mobile operator to offer a 4G service in the UK, it provided few details in its financial results of how the high-speed wireless data service is going down with its customers. This led analysts to conclude the operator has not made the most of its headstart. “If customer uptake was far ahead of expectation, then we would hear about it. We therefore have to conclude that uptake has not been spectacular.” said Steven Hartley, principal analyst at Ovum.  Hartley then went on to be more candid: “EE has everything in its favour for LTE (4G) to be a success… Therefore, unspectacular LTE uptake will be due to brand and pricing,”

This laid the backdrop nicely for the results of the 4G spectrum auction, announced the day after this news. After a clash of mobile titans, Vodafone, EE, O2 and 3 bought chunks of the lower bandwidth best suited for national 4G coverage. In an interesting move, BT spent £186m on buying some of the frequencies at the higher end, which will bolster its mobile broadband services. This signals a focus on mobile services at the group – operations which it decided to sell a decade ago.

So we now know who has a slice of the 4G pie. But the result is less rosy for the Treasury than it is for the operators as the auction of the airwaves raised around £1bn less than predicted. Cue another Ovum analyst, Matthew Howett: “Despite all the noise being made about the UK’s 4G auction, what you can’t hear is the sound of champagne corks popping over at the Treasury.” This is bad news for George Osborne as the projected fall in the size of the UK’s deficit this year was reliant upon the 4G auction meeting expectations – so the UK’s financial situation now looks worse.

Either way, we can now expect to see roll-out of 4G this summer, albeit incrementally. But what effect will this have on inhabitants of the UK? In terms of business, the provision of 4G is seen by the government as a catalyst for economic improvement as it offers the ability to access data rapidly and remotely at all times. This means more cloud based software, an increase in the Bring Your Own Device trend, the consolidation of machine to machine communication and an overall reliance on connectivity by business like we’ve never seen before.

And for consumers? In effect, the service provides home broadband speeds for mobile phones, meaning that people can watch and listen to music streamed over the internet while on the move as well as use video calls and social media. The value of the benefits that 4G services will provide to UK consumers over the next 10 years is likely to be at least £20bn, according to telecoms regulator Ofcom.

This news is also significant for marketers. Brands will have an army of connected customers who will be attached to social media at all times. We may also see a reduction in the rural divide, as connectivity is countrywide. And content marketing should also see a boost, as consumers everywhere look for interesting information at the touch of a button.

Should 4G play out as planned, consumers and businesses will profit from a more connected Britain. Roll-out begins this summer so there’s still plenty more waiting and work to do, but this week will certainly be seen as a significant one in the life of high speed mobile data.

  • Clash of the mobile titans

  • 4G will be rolled out across the summer