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30 August 20120 Comments by Jon M

Ofcom grants Orange and T-Mobile 4G monopoly

Everything Everywhere – the parent company of Orange and T-Mobile – has just been granted an effective monopoly on 4G in the UK by governing body Ofcom. The network is already the biggest in the country and will only be helped by this latest decision.

Over the last few months, Everything Everywhere has been lobbying strongly for this concession but the decision from Ofcom has only just been announced. The claim all along has been that the much-delayed launch of 4G in the UK must be prioritised over all else. Somewhat predictably, Everything Everywhere have been trying to claim that it’s better to get some 4G services than none even if that provides them with a huge competitive advantage. Conveniently, the only company who thinks this is an acceptable side-effect – Everything Everywhere – is the company that serves to benefit the most.

What Ofcom has decided is that Everything Everywhere can use its existing mobile spectrum to roll-out 4G services. It can start doing this as soon as September this year although it claims that things won’t actually get started in reality until some time later. Everything Everywhere is able to use existing spectrum as it already has a glut of it after the merger of Orange and T-Mobile. In fact, altogether the company actually owns about half the spectrum in the country. All the other networks will be forced to wait until the end of 2013 at the very soonest.

Everything Everywhere’s rivals were quick to condemn the ruling. Three Mobile, who are buying some of EE’s spare spectrum claimed that the decision has “distorted” the competitive landscape in the UK and will be detrimental to mobile users. O2 also were quick to claim that the ruling was unfair and damages the competitive environment. Even Vodafone used strong language in decrying the ruling insinuating that it will be bad for consumers as well as business and the UK economy as a whole. Obviously it’s hard to sympathise with Vodafone when they’ve dodged tax to the tune of £6 billion, but ignoring their hypocrisy, they do have a point.

What it means for users is that there will be a working 4G network in the UK some time in 2012. Unfortunately it won’t be available for many people as it will only be usable by Everything Everywhere’s customers on Orange and T-Mobile.

Everyone else will have to wait until 2013 for the wider Ofcom auction of spectrum for 4G communications. With the continuing faff around Ofcom’s mismanagement of the 4G spectrum auction, all the other networks will have to wait to get everything sorted. A non-trivial risk is that further legal action from the mobile networks about this latest decision for Ofcom will not only delay Everything Everywhere’s attempt to roll out 4G early but could also have a detrimental impact on keeping the already-much-delayed 4G auction to schedule.

In reality, only time will tell how Everything Everywhere’s monopoly will affect the mobile market. Do you think their massive headstart on 4G will make a big difference? Would you consider switching to a mobile network for 4G access? And what do you make of Ofcom’s decision?

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