UK Launches LTE Trial, But Is It Falling Behind In The 4G Race?

Frustrating news for those in the UK who have eagerly been awaiting the first 4G services. The country, home to some of the most mobile-savvy consumers in the world, is now facing a delay well into 2012 before its national operators can even begin to consider how they would deploy super-fast mobile broadband networks. The news, ironically, comes at the same time as two operators kick off a trial of one 4G technology, long-term evolution (LTE), in the west of the country.

The UK regulator, Ofcom, said last week that auctions for 4G spectrum — originally scheduled for the first quarter of 2012 — will now likely be delayed until Q4 2012. LTE networks at their best can deliver data at speeds of 150Mbps, compared to the 1.5Mbps of current 3G networks. More realistically, early LTE services are likely to deliver speeds of around 10Mbps.

The news — which Ofcom slipped into an update to “stakeholders” rather than in a straight news release, noted that the regulator had received “a number of substantial and strongly argued responses” to its original auction consultation on 800MHz and 2.6GHz spectrum, conducted between March and May of this year. The 800MHz and 2.6GHz spectrum bands are the two bands that operators would use for LTE services.

The upshot? More government red-tape, it seems. “In light of these responses, and the significance of the decisions that we need to take – decisions that are likely to shape the future of the mobile sector in the UK for the next decade or more – we have decided to undertake a further round of consultation on these issues,” Ofcom notes.

That second consultation will likely come out later this year. Stakeholders — that is, operators, vendors, municipal bodies and others impacted by the auction — will then have at least two months to respond to the consultation. Ofcom will then assess the responses and issue dates for the auction, “perhaps starting in Q4 2012.”

Perhaps sensing that people would assume this means “big delay”, Ofcom points out that the spectrum would not have switched over, in any case, for new use until 2013, “so this step is unlikely to have a material impact on the timeline for the availability of new services to consumers.” But as Mobile Today points out, the delay will mean that new services will not likely come online until 2014. That’s a full three years (and possibly more) after the first LTE services went live in the U.S., with Verizon Wireless.

Ofcom does not go into details about what exactly stakeholders have flagged up that has led to it delaying the auction. Separately, though, mobile operator Three has been outspoken how it would fare in an auction against the other three, much larger operators, especially if the others were allowed to use spectrum that they already owned to extend those services, rather than simply bidding for new spectrum.

There may also be questions about whether the government will be favoring the highest bidders, or whether there will be other considerations: when operators bid for 3G spectrum in 2000, it raised £22.47 billion ($35 billion) for the government’s coffers.

What’s ironic with these delays is that there seems to be a clear sign from operators in the UK that they want to get the ball rolling with 4G.

This week, BT (NYSE: BT), working with Everything Everywhere (the JV between France Telecom’s Orange and Deutsche Telekom’s T-Mobile in the UK), kicked off services on an LTE trial in Cornwall that it announced back in May of this year. The trial covers some 200 households and focuses only on dongles to use with fixed and portable PCs rather than mobile devices.

It’s not clear whether collaboration between BT and Everything Everywhere will be on the cards in the commercial game as well, but Everything Everywhere today took one more step towards merging their networks more completely: the two announced that subscribers on the two networks will now be able to access each other’s 3G networks, which will improve overall coverage.

The Cornwall trial aims to show the government that LTE can be used in remote areas where building out fixed broadband would be cost-prohibitive. The government has earmarked £530 million ($829 million) in subsidies to build out broadband in remote areas — but of course if the funds are used for LTE, that could be useful to the operator for more than just remote-area coverage.

Although the UK government has set ambitious targets to be a leader in mobile broadband services in the region, other countries in Europe are quite a way further along the road to realizing 4G rollouts. At the end of September, Italy completed its 4G auction (raising nearly €4 billion); Germany and Spain have also completed their auctions; and France is in the process of allocating its spectrum. Meanwhile, Sweden already has 4G services in place.