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Google ‘Could Bid’ For UK Mobile Spectrum, Says ‘Highly Speculative’ Report

Google (NSDQ: GOOG) is “considering” buying some of the mobile spectrum Ofcom yesterday said it would auction in 2009, laying the ground for what would be a move in to the UK mobile operator market. As posted yesterday, the regulator wants to grab portions of the 900MHz spectrum back from Vodafone (NYSE: VOD) and O2, drop limits restricting their use to 2G and auction them back to other operators (see release and consultation). It’s a move designed to increase the geographic availability of 3G services and to stimulate competition. Today, The Guardian reports Google considering a bid, but the paper’s report goes no further and doesn’t quote any particular source.

We’ve contacted Google for a response. This from the UK spokesperson: “Given that Ofcom only announced the spectrum news on Thursday, I think The Guardian might be running away a little. It’s a highly speculative article and we don’t comment on rumour or speculation.” So, no denial, but no confirmation, either.

Given events in the US, though, it’s not implausible. There, Google has said it would be interested in the upcoming spectrum auction if the Federal Communications Commission agrees to rules it has been seeking (which it looks like they will for the most part). That spectrum could go for at least $4.6 billion (£2.3 billion). This story is also an opportunity to trot out the Google Phone rumours. Is owning its own mobile spectrum a precondition to Google unveiling its own phone? Other mobile virtual network operators (MVNOs) exist by leasing then rebadging network capacity from rival operators.

But this is the Big G, and that might be threat enough to the UK’s five existing players that they’re reluctant to let Google through the gate. Ofcom hopes to auction enough spectrum for three companies. Another reason the process favours new entrants – the five main networks paid £22.5 billion (now $44.88 billion) for 3G spectrum in 2000; can they stomach coughing up still more?

One Response to “Google ‘Could Bid’ For UK Mobile Spectrum, Says ‘Highly Speculative’ Report”

  1. Google could well lease then rebadge network capacity from rival operators as an MVNO – but then it would have to buy back this – normally expensive – information about the user's location which it will require to send targeted advertising, a la Mobile AdSense. The only other option is to use the GPS which wil be inside most handsets in a year or so, assuming this is a viable option.