Among the budgetary announcements this week, plans for an auction of new a new 4G spectrum next year were revealed.

After the 3G (third generation) sell-off off of bandwidth a decade ago helped off-set government spending to the tune of £22.5 million, the Chancellor will be hoping there is a similar amount to be made as mobile providers clamber to be able to provide a mobile connection that could be faster and more functional than most home and office broadband connections.

The draft rules for 4G have been much anticipated but since Germany only raised €4.3 billion from its own 4G auction last year the mobile windfall might be much smaller than many hope. While the telecoms market remains strong, many see the hefty price paid for 3G licences led to the decline in competition in the industry with Orange and T-Mobile since merging and the new fourth player Three still struggling for market share against the more established names.

Yet the new rules appear at least retain the existing competition with explicit mention of four providers likely to be governed by regulator Ofcom limiting the amount of the spectrum any one provider can own. Yet, experts forsee that even this could be challenged in the courts by the big providers wanting to take larger slices for themselves. The potential of 4G means that whilst the licences might not raise as much as the government would like, there is potential for large profits to be made in the future by 4G providers, simply due to the diverse uses it could offer. Such legal wrangling is only likely to delay the 4G service launch which is already not likely until 2013. The 4G spectrum will include part of the former analogue TV range and with the TV Digital switchover having taken years, the practicalities of rolling out 4G have been affected.

With video calling, fast internet browsing and a host of app-driven tools already available on 3G, the potential of 4G is mouth-watering. But still two years away from launch it could mean that the UK loses its march on other nations like Japan, Sweden and Germany who will be 4G-ing long before us.

Should companies be considering 4G potential now even before licences have been granted?

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