O2 Joins Vodafone In Questioning Ofcom’s EE 4G Decision

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

O2 has added its voice to those questioning Ofcom’s decision to allow Everything Everywhere to deploy a 4G LTE network

Mobile operator O2 has finally joined the party and made its view known on Ofcom’s decision to allow Everything Everywhere to reuse its existing 1800MHz spectrum to deploy a 4G LTE network.

Ofcom announced the decision on 13 March, and immediately Vodafone voiced its opposition, saying it seriously doubted that consumers’ best interests were being served by Ofcom giving one company a significant head start before any of its competitors have a clear path to 4G.

Vodafone hostility

Vodafone stepped up its attack last weekend, and in an interview with the Sunday Times Vodafone UK boss Guy Laurence accused the regulator of ‘taking leave of its senses’ in accepting the proposal from Everything Everywhere, the UK’s largest mobile operator by customer base.

Vodafone’s Laurence also said that Ofcom was “all but agreeing to grant the largest player in the market a headstart on the next generation of mobile internet services.” The Vodafone CEO claimed Everything Everywhere would now “be free to bog down” the forthcoming 4G spectrum auction in endless litigation, preventing other operators from building 4G networks.

But despite Vodafone’s opposition, O2 and 3UK and remained curiously silent on the matter – until now.

O2 Concerned

“From the very start of this process, Ofcom has said that the UK must retain a competitive market environment and that it will remove the ability for operators to behave strategically over spectrum allocation,” an O2 spokesperson told Techweek Europe in an emailed statement.

“To this end, Ofcom’s auction proposals had much to commend them, and we were minded to support a small spectrum reservation for Hutchinson or a new entrant, if Ofcom could make a stronger case for four players,” O2 said.

“However, we are concerned that Ofcom’s other proposal  to allow one operator to launch 4G early on its existing spectrum is contradictory to its objective of delivering a competitive market environment with four competing players,” said the O2 spokesperson.

“This could expose the  process to further risk of delay,” the spokesperson added.

Consultation Process

The consultation process regarding Ofcom’s 4G spectrum auction rules actually closed on this Thursday (22 March), but TechweekEurope understands that mobile operators have until 17 April to formally register their views on Ofcom’s decision to allow EE to reuse its existing spectrum for 4G.

“We welcome all views from stakeholders as part of the consultation process,” an Ofcom spokesperson told Techweek Europe.

Ofcom’s decision was always bound to attract criticism, as Everything Everywhere is now the largest operator in the UK, following the merger between Orange UK and T-Mobile UK in July 2010. However that merger was provisional on the fact that Everything Everywhere sold a quarter of its 1800MHz bandwidth because of its potential market dominating position. And this has not happened yet.

But it is worth noting that this is not the first time that Ofcom has allowed existing spectrum to be reused for new technology. In March 2011, O2 launched 3G services on spectrum formerly reserved for 2G. This move was possible after Ofcom said in January 2011 that UK mobile operators would be able to offer 3G services using 2G spectrum.

Auction Delays

Meanwhile the industry is awaiting the spectrum auction that will finally allow for the launch of 4G networks across the UK.

The auction for the necessary spectrum to build 4G networks has already been delayed twice, amidst operator bickering and threats of legal action.

The auction won’t take place until the latter part of this year at the earliest.

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