UK telecoms regulator Ofcom has published its long-awaited decision on the upcoming 2.3 GHz and 3.4 GHz bands, and Three is not happy.
July 11, 2017
UK telecoms regulator Ofcom has published its long-awaited decision on the upcoming 2.3 GHz and 3.4 GHz bands, and Three is not happy.
The main issue in question wasn’t the mechanics of the auction itself, but rather the matter of how much spectrum each mobile player should be allowed to have. Three has long argued that the spectrum situation in the UK is imbalanced with, coincidentally enough, Three not having enough of it. The fact that most of this spectrum, bar the stuff Three was given when it formed, was acquired in fair and open auctions doesn’t seem to mitigate Three’s righteous indignation.
Three wants there to be a cap of 30% of available spectrum owned by any one company. EE/BT currently owns 42% of usable spectrum (see table) so such a ruling would require stripping it of a hell of a lot. It would also severely restrict Vodafone’s participation in future spectrum actions. Three is, in effect, asking Ofcom to embark on a campaign of aggressive spectrum wealth redistribution.
Ofcom seems have resisted any Marxist inclinations it may have and decided to chart a middle ground, as indicated last year. It has placed a cap of 255 MHz of immediately usable spectrum, which includes 2.3 GHz and means EE won’t be able to bid for any of the 40 MHz of it on the table. Ofcom has also imposed a cap of 340 MHz on the overall amount of spectrum owned by any one company after the auction of 150 MHz of 3.4 GHz spectrum (37% of the new total, also including yet-to-be auctioned 700 MHz spectrum), meaning EE will be able to win no more than 85 MHz of it.
So far so good for EE. The company never expected to have much of a shout at the 2.3 GHz band and as you can see from the table it already has plenty of spectrum at similar frequencies. The thing EE’s Ofcom lobbyists will be looking for urgent clarification on, however, is the status of the cap when the 700 MHz becomes available.
EE has very little low frequency spectrum, which is especially handy for rural coverage, and would presumably want to get as much 700 as possible. If the cap is going to remain in place for that, EE is likely to be reluctant to eat too far into its allowance with 3.4 GHz, which will only be used for 5G anyway.
“Spectrum is a vital resource that fuels the UK’s economy,” said Philip Marnick, Ofcom’s Spectrum Group Director. “We’ve designed this auction to ensure that people and businesses continue to benefit from strong competition for mobile services.”
That’s not how Three sees it. “Ofcom’s proposal is a kick in the teeth for all consumers and in particular for the near-200,000 people who signed up to the