The UK’s telecoms regulator, Ofcom, has made the controversial decision to allow Everything Everywhere, which owns the T-Mobile and Orange brands, to use its existing bandwidth to launch 4G services.
It’s ruled that the company should be permitted to use its 1800 MHz spectrum in advance of a spectrum auction later this year that will allow rival operators to launch competing 4G services.
“Ofcom’s decision to make 4G available this year is great news for the UK,” says Everything Everywhere in a statement.
“Consumers will soon be able to benefit from the much greater mobile speeds that 4G will deliver. 4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK.”
Not everybody, though, is as delighted with the news, with many observers complaining that the decision is anti-competitive.
“We are frankly shocked that Ofcom has reached this decision,” says a Vodafone spokesperson.
“The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.”
The ruling applies to the full block of 1800MHz spectrum that Everything Everywhere owns in the UK – including the 2x15MHz that it’s been ordered by the European Commission to divest following the Orange-T-Mobile merger.
Hutchison 3G – known simply as 3 – is expected to buy the spectrum in a deal which must be finalised by the end of September.
“Ofcom’s timing is particularly bizarre given the reports that Everything Everywhere is currently in discussions to sell some of its spectrum to 3, which Ofcom has previously been at such pains to protect with its over-engineering of the 4G auction,” says Vodafone. “This means the balance in the auction will fundamentally change.”
But Thomas Wehmeier, principal analyst at Informa Telecoms & Media, says the spectrum sale could mean that the UK has two 4G networks up and running by Christmas, if 3 moves quickly to launch its own service.
“But, as is always the risk in the fiercely competitive and ligitation-prone UK market, it’s possible that Ofcom’s decision could be delayed by legal challenges,” he says.
“The risk for the UK other’s mobile operators is that dragging this through the courts could serve only to further delay the timing of the upcoming auction and thereby pause their own plans to launch 4G.”