O2 and Vodafone win big in UK’s £1.4 billion 5G spectrum auction

• Ofcom announces results of U.K.'s 5G spectrum bidding war.
• Vodafone wins largest share of 3.4GHz band, but O2 emerges on top with 5G and 4G gains.
• Telefónica-owned carrier jumps from 14% overall spectrum ownership to 20%, just ahead of Three.

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The biggest players in the U.K. mobile industry have collectively shelled out a whopping £1.4 billion to the government in a bidding war that will shape the future of 5G connectivity in the region.

Carriers O2, Vodafone, Three, and EE all participated in the U.K.'s latest spectrum auction for mobile airwaves in the 3.4GHz band for 5G services, as well as an additional 40MHz of the 2.3GHz 4G spectrum.

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Telecomms regulatory body Ofcom announced the principal results today, and while Vodafone now appears to be in pole position in the 5G stakes, taking home 50MHz of the 3.4GHz spectrum at a cost of £378m, it's O2 that has emerged as the overall winner.

The Telefónica-owned carrier has snatched up 40MHz of the 5G spectrum for £318m—matching the total snagged by EE and double Three's 20MHz haul—and the entire 40MHz of 4G spectrum, with the latter costing just under an additional £206 million.

In terms of overall spectrum ownership, O2 has now jumped from last place with 14% share to third with 20% holdings. Three now brings up the rear with 18%, with Vodafone (27%) and BT-owned EE (35%) rounding out the top two.

All four major networks now seemingly all hold enough 3.4GHz spectrum to bolster their 5G ambitions.

Thanks to stricter spectrum caps and bidding rules in place compared to the free-for-all £22 billion 3G and £2.3 billion 4G auctions in previous years, all four major networks now seemingly all hold enough 3.4GHz spectrum to bolster their 5G ambitions.

Fifth-generation wireless technology is expected to begin rolling out in the U.K. in 2020 to power next-generation Internet of Things (IoT) devices, driverless cars, smart home tech, fast 4K mobile streaming, and other technologies reliant on superfast data speeds. Visitors to the O2 Arena and the surrounding area will be able to test out 5G speeds sometime in the second half of this year.

O2's 2.3GHz spectrum winnings, meanwhile, will provide an almost immediate boost to the company's 4G services. Speaking to Reuters, Telefónica U.K. CEO Mark Evans hinted that London will be the first to benefit, followed by Edinburgh, Newcastle, Leeds, and then other cities.

If there's a 'loser' coming out of the bidding process, it has to be newcomer Airspan Spectrum Holdings. The U.S.-owned firm, backed by Japan's Softbank, failed to win any spectrum at all.

Ofcom will now start what is known as the "assignment" stage where the principal winners will bid on where their spectrum holdings will land in terms of frequency bands. Another auction will take place in the latter half of 2019 for spectrum in the 700MHz band. 

Looking for More UK content? Be sure to check out our guide on where to buy phones in the UK, as well as our guide on the best UK plans for international calling. 

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