Vodafone spends most at UK 4G auction

February 21, 2013 // By IHS
Following a big round of spending in the 4G auction in the United Kingdom, Vodafone signaled its intent to aggressively regain lost market ranking in the country’s wireless business, according to according to an Analyst Commentary from the IHS Screen Digest Mobile Technology Intelligence Service.

In the auction results announced on Tuesday, Vodafone was the biggest bidder, with its £790.7 million representing more than one-third of the entire auction’s proceeds. The No. 3-ranked operator acquired bandwidth both in the short-range 2600 MHz band, as well as in the longer-range 800 MHz frequency, which is essential for the nationwide deployment of 4G data services. This development could allow Vodafone to reclaim its status as a contender for leadership in the U.K. wireless market.

“Just four years ago, in 2009, Vodafone had a lock on the second-place ranking in the U.K. wireless market, slightly behind leader O2,” said Daniel Gleeson, mobile media analyst at IHS. “However, the merger of Orange and T-Mobile into Everything Everywhere relegated Vodafone to third place, several million subscriptions behind the top market player. By leading the way in spectrum spending, Vodafone has made a statement it intends to reclaim its former position in the market.”

Vodafone in 2009 was ranked No. 2 in the U.K. wireless operator market behind O2 UK. The two companies in 2009 were very close in market share, with O2 accounting for 26.1 percent and Vodafone at 23.4 percent. However, by 2012, Vodafone had settled into third place, with a preliminary estimate of a 23.8 percent share compared to 33.1 percent for Everything Everywhere and 28.7 percent for O2, as presented in the attached table.

Beyond expanding its reach in 4G, Vodafone’s bid indicates that it plans to remain a player in the market for older 2G services, with hopes to expand its market share.

“By spending big in both bands available in the U.K. auction, Vodafone is showing it doesn’t plan to shift its 2G frequencies at either 900 MHz or 1800 MHz to 4G services at any time in the short to medium term,” Gleeson said. “Vodafone is clearly targeting all types of services from low- to high-end in a bid to garner the largest possible