Virgin Media testing 4G spectrum ahead of possible auction bid

Virgin Media has revealed it tested a 4G network running over small cell technology in central London in December, suggesting the firm may bid for a portion of the 800MHz or 2.6GHz spectrum in the auctions later this year.

The firm ran the test network from its Oxford Street store, with staff from its innovation team accessing the service on laptops via 4G dongles, in order to see the capacity levels such a network could provide.

At present Virgin Media uses T-Mobile's network to deliver its mobile phone services but by testing out a mobile network itself the firm may be looking to broaden its own holdings as demand for mobile spectrum is set to rocket.

A Virgin Media spokesperson confirmed the firm was keen to seek out new ways in which it could meet the growing demand for mobile internet access from users of smartphones, tablets and laptops.

"There is a huge challenge to meet this growing demand for connectivity and we are looking at ways to put the power of our fibre-optic network where people need it most, both inside and outside the home," they said.

"We are working closely with partners across the UK to develop our proven Wi-Fi solution and our recent 4G trial proved the capability of our small cell solution."

The possible entry of Virgin Media into the 4G spectrum race comes after Ofcom unveiled its revised consultation document on the auctions, which included provisions aimed at encouraging new entrants to bid for spectrum holdings.

Ovum analyst Steven Hartley told V3 that the entry of a firm like Virgin Media into the 4G market would make sense and it may be joined by rivals also looking to expand their assets.

"There are several notable firms missing from the UK's mobile market: BT, Virgin, Sky all have strong broadband offerings but very little in the mobile space, but they may all look to bid for a portion of the spectrum later this year," he said.

"It could even be the case that some of these firms form consortiums to work together, as taking on incumbents like O2 or Vodafone from scratch could be difficult."

Hartley added that Ofcom deserved credit for creating an auction system that appears to work for both existing operators and new entrants.