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27 June 20112 Comments by Jon M

4G spectrum auction – 3 responds to Ofcom

3 has reacted with anger to in respond to the latest Ofcom consultation regarding the huge 4G auction next year. The UK’s smallest mobile network lambasted the regulator’s decision to refarm the 900MHz band back in January as “potentially unlawful”. Overall, 3 clearly feels that it’s been shortchanged and isn’t afraid to show it even following the Government’s warning regarding the 4G auction last week.

Originally, Vodafone and O2 were both given the 900 Mhz band of spectrum at 900 MHz for their 2G services, while Orange and T-Mobile already won an auction for a huge amount of 2G radio spectrum at 1.8GHz. However, in January Ofcom changed the rules, royally pissing 3 off by allowing 3G services to be deployed in those frequencies too.

3’s issue is that it bought expensive 3G radio spectrum at 2.1 Ghz on the understanding that it was the only band where 3G services would be permitted. Now Ofcom have allowed 3G coverage on other frequencies, it severely devalues 3’s original investment as it is now much less scarce. Of course, as 3 has concentrated its investment in the 2.1 Ghz band, it has lost out compared to other the networks which own spectrum in other bands that have increased in value.

T-Mobile and Orange at least paid market rates for their 2G spectrum, and 3G at 1.8 GHz is still pretty theoretical, but 3G at 900 MHz is already supported by the latest handsets and O2 has wasted no time at all in rolling out 3G connections in its 900 MHz spectrum (in London at least). Given that the 900MHz spectrum never went up for auction 3 is, perhaps justifiably, miffed.

Now 3 has lost its appeal against the latest Ofcom ruling and it is demanding that they now use the upcoming 4G auction to address the balance in its favour. We can’t see it happening though. Ofcom has to hurry up and get the 4G spectrum auction sorted out as the UK is already lagging behind the rest of the world. It can’t afford any more delays over negotiations. However, 3 (and the other networks) will definitely delay the auction process as long as they can at the expense of their consumers just so they can save on immediate investment in spectrum and infrastructure.

Hopefully we’ll be seeing 4G in the UK soon though.

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2 Responses to “4G spectrum auction – 3 responds to Ofcom”

  1. person287 8 July 2011 at 09:41 Permalink

    To be honest I agree with you that the operators are just trying to stall the auctions as much as possible so they don’t have to invest in new infrastructure. I’m not sure though how much Ofcom is seeing this.

    • Mobile Network Comparison 8 July 2011 at 10:09 Permalink

      Ofcom are generally clueless about this. Stay tuned for a later slightly-controversial article about why it could be best for Ofcom and consumers if they gave away the 4G spectrum completely free.

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