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Three joins Vodafone in auction resistance, but falling on deaf ears

Three and Vodafone are both calling for the spectrum auction at the beginning of 2021 to be scrapped, but Ofcom has stated there are no plans to make alterations.

With priorities being rearranged during the COVID-19 pandemic and budgets under severe strain as Huawei equipment gets ripped out of the network, Three has joined Vodafone in calling for the spectrum auction to be scrapped, replaced by an administrative process where the risk of investments getting out of hand is effectively removed. But as the duo present a logical idea to the regulator, Ofcom has unveiled the plans for a January auction for 700 MHz and 3.6-3.8 MHz spectrum.

“The mobile industry is facing very significant extra costs, from the substantial investment required to roll out 5G to the costs associated with increasing network capacity as COVID-19 alters the geographic demands on the network,” a Three spokesperson stated. “The recent Huawei decision will of course add to the bill facing operators.

“Whilst we recognise the pressures on the Treasury and appreciate their support to date, the Government needs to take a balanced approach given the extra costs faced by the mobile industry. An administrative allocation of spectrum would solve both dilemmas, simultaneously raising significant funds for Government (approximately £1.1bn) whilst also creating a pro-investment environment in which operators can focus on improving their networks for the benefit of consumers.”

It should surprise few that Three has taken this position alongside Vodafone. Both the operators are facing additional costs to remove Huawei equipment from the network, as is BT. BT offered the following statement, though behind closed doors one would presume it is on the same page as Three and Vodafone.

“We note Ofcom’s decision to proceed as planned with the auction of additional spectrum bands for 5G,” BT said.

“BT is continuing to invest and lead in roll-out of 5G and full fibre networks across the UK. We believe that an environment which continues to incentivise and support these investments in the next generation of networks is key to the success of UK PLC.  New spectrum would provide improved capacity and quality of 5G coverage in the UK to the benefit of consumers and businesses.”

O2 has remained unsurprisingly quiet on the matter. As the only UK telecoms operator with immaterial exposure to Huawei, it is not an active player in this debate.

Interestingly enough, Ofcom does not seem to think there will be any changes to the spectrum auction process. An open auction will decide the allocation of spectrum as it stands, though the telecoms operators are within their rights to file an appeal. This appeal will have to be filed with the relevant parties by the end of August, while Ofcom should be notified by August 17.

The spectrum auction is scheduled to take place in January with 80 MHz of spectrum in the 700 MHz band and 120 MHz of spectrum in 3.6-3.8 GHz band available. It is of course very encouraging that the regulator is attempting to make more of this valuable resource available to the industry, but a bit of common sense should have perhaps been applied.

Considering the impact of COVID-19, while three of the four operators are dealing with the consequences of a Huawei ban, perhaps an open auction is not the best idea. The price of spectrum has been creeping up across the world, and the last thing anyone wants is a financially strained telecoms industry as 5G begins to ramp. That is what most people would call a net loss.

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3 comments

  1. Avatar James 04/08/2020 @ 8:46 am

    Pulling Huawei equipment won’t help, Huawei holds 5G patents, they will retaliate by not licencing or refusing permission of their paintent. Game over!

  2. Avatar Robert Yates 04/08/2020 @ 9:13 pm

    If no one trusts the Chinese, why was huwaai(sp), equipment installed in the first place?, well, I’m not the one who makes the decisions, can just see it for what it is. See, can’t even spell huwaai properly, what will it be replaced with, Russian/Soviet equipment, big isn’t always best though. See, the Americans trying to get in anyway they can, world domination comes to mind, won’t they ever learn? their gun-ho attitude to things, all the power and might they have, just to give it to someone else whom they think deserves it. From their far off position over the sea. They are so terrified of thier class action lawsuits it’s untrue, in support of the fifth amendment clause, whatever that means.
    Why not let the people with the best skills in this kind of engineering do it?, oh yes, the uk already fell out with the e.u., Quite spectacularly I might add, Germany comes to mind, They are good quality and they are expensive as hell. Maybe we as British people aren’t used to the level of freedom of speech that people from the continent have, Know the ones?.
    And have non sensitive backbone equipment installed by those ones from the east, as they seem to have the knowhow, experience, and labour/ robotics knowledge/experience to do it. To cut a very long story short, give someone else a chance!. Always this dice between the Americans and Soviets. East vs. West is what it boils down to. To however reads this, I apologise for my political rant against the Americans. I can’t rant against the British because I live here, Lol for the most part, if you forget about fact that they/we(although I don’t consider myself fully British, rhodesian first, south African second, and then British. Won the war, They are alright, they just tend to overdo everything. Lol. Have a nice day ( You might think I have an identity crisis, well, I don’t, I know exactly who I am)

  3. Avatar Virginia makaddas 05/08/2020 @ 10:30 am

    I love hauwai I don’t think it should be gotten rid of just because of trumpi who the hell does Donald trump think he is he is not God and u think the government should keep Huawei as to be honest three and vodaphone is rubbish I only have one contract with three yet they are trying to make out I have another contract for a phone which I swear I never took out which I know I didn’t they are rubbish man

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