UK mobile operator Everything Everywhere was today (13 March 2012) given permission to refarm some of its 1800MHz spectrum for 4G mobile services by the telecommunications regular Ofcom.
Ofcom stated: ‘Allowing Everything Everywhere to reuse its spectrum in this way is likely to bring material benefits to consumers, including faster mobile broadband speeds and – depending on how Everything Everywhere uses the spectrum – potentially wider mobile broadband coverage in rural areas.’
It continued: ‘Ofcom has considered whether allowing Everything Everywhere to use this spectrum in this way would distort competition, and provisionally concluded that it would not. And given the benefits this would bring to consumers, Ofcom is minded to allow this change of use.’
An Everything Everywhere (EE) spokesperson said: ‘It’s very important that the UK does not get left behind in the building of a new infrastructure for the digital economy. We welcome today’s notice of 1800MHz licence variation from Ofcom, as it suggests Ofcom’s willingness to encourage the early deployment of 4G LTE.’
The UK is required to consider applications for liberalised 4G use of the 900MHz and 1800MHz spectrum in light of a Decision of the European Commission (2011/251/EU) which amends a prior European Commission Decision (2009/766/EC).
Ofcom announced that interested parties have four weeks in which to submit their views on this proposed change.
Rival operator Vodafone expressed it surprise at the decision. A Vodafone UK spokesperson said: ‘We share the regulator’s desire to see the next generation of mobile internet services rolled out quickly and placed within the reach of many more people in rural areas. But we seriously doubt that consumers’ best interests will be served by giving one company a significant head start before any of its competitors have a clear path to 4G. We will need to review Ofcom’s reasons for pressing ahead with liberalisation of Everything Everywhere’s existing spectrum before making our submission as part of the current consultation.’
The spokesman added: ‘The next generation of mobile internet services has the potential to bring substantial benefits to British consumers, businesses and the wider economy. But the full benefits will only be realised if there is more than one network providing 4G services. In its plans for the spectrum auction in early 2013, Ofcom has already stated it wants competition among four operators. So it comes as a surprise that the regulator is now considering giving the largest player in the market permission to use its existing spectrum for 4G services before the rules for the auction have even been concluded or it has divested spectrum as required by the European Commission.’
Vodafone noted that Everything Everywhere is the only player in the UK market that has the potential to run LTE on its existing spectrum. EE is compelled to divest itself of 2 x 15MHz of 1800MHz spectrum as a condition of gaining regulatory clearance for the merger between Orange UK and T-Mobile UK. The merger has left EE with by far the largest spectrum holdings among UK operators.
In its consultation today, Ofcom has also said Vodafone and O2 can liberalise their 1800MHZ spectrum. However, Vodafone pointed out that it and O2 each have less than a fifth of the spectrum at 1800MHz that Everything Everywhere has, even after it has sold the 15MHz. Ofcom has acknowledge this saying: ‘We recognise that their (O2 and Vodafone) smaller holdings in the 1800MHz bands are less attractive’ for LTE use.
Vodafone also pointed out that neither it of O2 is likely to use their 900MHz spectrum to run LTE, as no LTE equipment is currently available in the 900MHz band.
Matthew Howett, analyst at Ovum, commented: ‘Ofcom’s proposal to allow a variation of Everything Everywhere’s 1800MHz spectrum licence is both consistent with the EC’s liberalisation process and follows a request to Ofcom during the recent additional consultation on the award of the 800MHz and 2.6GHz bands. The proposal to grant EE’s request is both a win for it and potentially consumers in terms of getting early access to 4G services – by as much as 15 months earlier than its competitors could launch services.
‘As we commented on previously, there appears to be growing interest in deploying LTE at 1800MHz given the nice balance of characteristics the band has – good coverage possibilities whilst also providing for capacity – both of which are necessary ingredients of a good user experience. With Ofcom no longer guaranteeing EE spectrum in the upcoming award [the 800MHz and 2.6GHz spectrum auction due at the end of this year], it would have been unlikely to dismiss this request and could in some ways be seen as offering EE a carrot to not legally challenge Ofcom’s current set of proposal for how the award should proceed.
‘Three is likely to be most critical of Ofcom’s proposal given its on-going battle with Ofcom over what they see as the regulator’s failure to properly consider the unequal sub 1GHz spectrum holdings during Ofcom’s implementation of the EC’s liberalisation decision. The moment is coming when it’s in the interests of all parties to let that award happen sooner rather than later. If the plan to auction the spectrum in Q4 2012 goes ahead then we could see widespread availability of LTE in the UK by the end of 2013.’