Delays in LTE spectrum awards will help UK operators

The other day I was asked by a journalist to comment on the delayed (and still legally threatened) UK 800MHz and 2.6GHz spectrum auctions. My comment was something pithy about MNOs crying out for spectrum while at the same time delaying the award with their squabbling. And it's true, they are crying out for it. And it's also true that they're delaying the award. That's not to say that they don't have some justified grievances of course. For instance that it's impossible to bid for spectrum if they don't know what's happening with refarming.
However, all this set me wondering whether a delay in award of spectrum for LTE might not have some positive consequences for them.

1. It will save them money. If the UK doesn't manage to get LTE deployed until 2014 or 2015 then the equipment should be cheaper, due to scale.
2. There's not really any point deploying LTE until LTE Advanced anyway. Plain ol' LTE doesn't offer many advantages over HSPA+. They both run at about 50MBit/s and the greater spectral efficiency of LTE only applies with big chunks of spectrum (which none of the MNOs have, but they may be able to negotiate during the current discussions). It's only with LTE+ that the benefits of spectral efficiency can cut across fragmented spectrum. So, the smart operators have generally taken the view that they'll upgrade their networks to HSPA+ and wait a bit until deploying LTE. In this the UK operators are being forced to make the smart decision. Not that I don't have ultimate confidence they would make the smart decision anyway you understand, but this at least guarantees it.
3. It delays the inevitable '4G' arms race. MNOs will be trying to outdo each other with who has the best '4G' network. Leaving aside whether LTE really counts as 4G, it will be interesting to see whether T-Mobile imports from the US its tactic of describing HSPA+ as 4G.
4. It worked for O2 with 3G. O2 is the leading operator in the UK. Part of that is down to adopting a pragmatic approach to deploying 3G. They did it when they had to (based on regulatory requirements) and when they felt the technology was up to the job (i.e. when HSPA kicked in).
5. It encourages innovation. The solution to greater and greater bandwidth demands and squeezed margins is not simply to keep adding more macro network capacity. If mobile broadband is unprofitable, as many MNOs are claiming, then STOP SPENDING MONEY ON ADDITIONAL EXPENSIVE KIT. Focus your attention elsewhere. I'd argue that a delay in LTE encourages MNOs to execute on these cheaper initatives first (as they should do) rather than last. There are numerous good examples: femtocells for offloading home traffic; better subscriber management to make all the bandwidth hogs pay up; and then there was this announcement from O2 that it would be rolling out a massive network of 'free' (i.e. ad-funded) WiFi hotspots. All good stuff.

So, my conclusion is that making the UK operators hold off LTE deployments might be the best thing for them. I'm pretty sure they're not going to see it that way.