Government-Hosted Summit Aims To Avoid 4G Showdown

The government is to host a summit including the four main mobile phone operators and Ofcom on Monday in an effort to broker a deal that could avoid a legal showdown and allow the rollout of 4G services to begin in the UK.

A spokesperson for the Department of Culture, Media and Sport (DCMS) confirmed that the meeting will take place on Monday, hosted by Maria Miller, who recently replaced Jeremy Hunt as Culture Secretary. The DCMS declined to give further details.

Spectrum auction acceleration

Among the issues to be discussed at Miller’s “peace talks” is the possibility of bringing forward the 4G spectrum auction, a move which could appease EE’s competitors, according to a spokeswoman for Three. Three confirmed that the meeting is to conclude late on Monday.

“We are awaiting the outcome of today’s meeting and will issue a statement once we see where we stand,” Three said.

Vodafone and O2 expressed dismay at Ofcom’s decision in August to allow EE to proceed with the launch of 4G services based on its own 1800Mhz spectrum, while rivals would have to wait for the spectrum auction to take place before they could launch their own services. Three has also said it would not rule out legal action on the matter.

EE launched its 4G network in September for testing purposes.

O2 has threatened legal action to prevent the launch of EE’s services, which would give it an effective monopoly on the 4G market until the conclusion of the already long-delayed spectrum auctions.

According to Three, Ofcom has said it could bring forward the spectrum auction date by about two weeks from its current January date, and could then speed up the handover of control of the spectrum, allowing services to launch in some areas in May or June of 2013. It had been previously thought that services could launch in October 2013.

If the plan is accepted by Three, Vodafone and O2, it could allow EE to set a launch date for its 4G services. EE has promised to offer 4G in 16 British cities by the end of the year.

High-priority issue

The issue of the UK’s long-delayed 4G rollout has become an increasingly pressing issue for the government, which has made the rollout of high-speed broadband coverage one of its top priorities.

One of Hunt’s last acts was to broker a month-long cooling-off period between the four mobile operators, EE (formerly Everything Everywhere), Vodafone, Three and O2, a period which is now coming to an end, according to sources cited by the Financial Times.

Under this agreement, the operators agreed to hold a series of talks during September before moving ahead with any legal action, while EE also delayed setting a launch date for its 4G services. The goal has been to stave off the threat of a legal quagmire which would only further delay the 4G rollout.

The UK is far behind countries such as the US and Germany, which already have established 4G networks.

The central question, according to industry observers, is whether Vodafone and O2 can be induced to allow EE to proceed with its 4G plans, a move which could give it an unbeatable advantage in the UK market for high-speed mobile Internet access.

iPhone 5 advantage

In addition to the advantage of time, analysts say the launch of Apple’s iPhone 5 smartphone adds to EE’s potentially strong position. The iPhone 5 supports the 1800 MHz spectrum used by EE, but not the 800MHz and 2600MHz bands Ofcom will auction next year for 4G use by EE’s rivals.

That means EE could offer 4G speeds on the iPhone 5, while competitors would be limited to offering 3G on the handset.

iPhone 5 4G support would be “a powerful boost to Everything Everywhere… and could well entice many customers to swap networks which, coupled with a two year contract (now standard in the UK market), would see customers locked-up well into 2014,” said Patrick Clark, head of telecoms for international legal firm Taylor Wessings, in a research note.

Matthew Howett, practice leader for regulation at analyst firm Ovum, agreed that support for 4G on the iPhone 5 is a “massive boost for EE”. However, he warned that this advantage increases the possibility that the other players will turn to litigation.

EE has also announced a range of other 4G-capable smartphones, including versions of the Samsung Galaxy S3 and Nokia’s Lumia 920 and 820.

Ofcom, Vodafone, O2 and EE did not immediately respond to requests for comment.

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