Following their £205 million spend at Ofcom’s recent LTE spectrum auction, O2 has announced plans to enlarge its 4G footprint across the country with 1,000 new sites earmarked.
At the Ofcom auction O2 spent £523.6 million to gain 40MHz of immediately useable 4G spectrum (2.3GHz) and 40MHz of spectrum expected to be used to launch 5G (3.4GHz).
The acquisition meant that O2 significantly boosted its share of spectrum holdings from 14% to a substantial 20%.
Spectrum relates to the radio frequencies allocated to the mobile industry and other sectors for communication over the airwaves. The Spectrum is considered a sovereign asset and its use is overseen by the government or a designated regulatory authority, in this case Ofcom.
Releasing the spectrum at Ofcom’s recent auction will allow companies to increase data capacity and enable customers to enjoy more reliable internet browsing. While Vodafone spent the most at the auction, commentators are agreed that O2 has been the most successful.
O2 emerged as the big winner, sweeping up all of the crucial 2.3GHz airwaves that can immediately offer much-needed 4G capacity. As the most spectrum-constrained operator, this sale was more crucial to O2 than any of its rivals and the result gives it the certainty to continue its mobile-centric strategy in the UK market.
It will also give parent Telefonica some clarity over its intended IPO for the network.- Kester Mann: principle analyst of operators, CCS Insight
According to O2, extra coverage has been earmarked for cities such as Leeds, Nottingham and London where 60 sites in the capital currently use the new spectrum after Ofcom made it available earlier this month.
Despite its boost of spectrum holdings O2 still lags behind EE and Vodafone who own 35% and 27% respectively of the sector. And O2 will not be immune to the current problems of decent 4G coverage. According to OpenSignal who monitor network performance the UK’s average 4G speeds are slower than Armenia’s.
Our newly acquired mobile spectrum allows us to further strengthen our award-winning network, enhancing our connectivity for our customers while boosting the economy and laying the foundations for 5G in Britain.- Patricia Cobian: CFO, Telefonica UK Ltd
O2 also announced plans for a 5G trial project at the former Millennium Dome in North Greenwich later this year. And in the company’s first quarter results they posted sales of £1.4 billion, a 2.9% increase on last year.