UK operators slam Ofcom’s proposals

The UK’s mobile operators have hit out at Ofcom’s latest proposals to allow Everything Everywhere to use its existing 1800MHz spectrum to offer LTE services ahead of its competitors.

Earlier this month, Ofcom accepted an application from Everything Everywhere , which would see the firm offering 4G mobile services in the UK by the end of 2012 using its existing spectrum. Meanwhile, Vodafone, O2 and 3UK would have to wait until Ofcom’s 4G auction in order to gain the spectrum necessary to roll out their LTE services, the first stages of which are on course to begin “by the end of 2012”, according to Ofcom.

The regulator had stated that interested parties have four weeks in which to submit their views on the proposal, and Everything Everywhere’s competitors have now voiced their discontent.

O2 said the move is contradictory to Ofcom’s objective of delivering a competitive market environment with four competing players.

“From the very start of this process, Ofcom has said that the UK must retain a competitive market environment and that it will remove the ability for operators to behave strategically over spectrum allocation,” said an O2 spokesman.

The spokesman added that, to this end, Ofcom’s auction proposals had much to commend them, and the firm was minded to support a small spectrum reservation for Hutchison or a new entrant, if Ofcom could make a stronger case for four players.

“However, we are concerned that Ofcom’s other proposal to allow one operator to launch 4G early on its existing spectrum is contradictory to its objective of delivering a competitive market environment with four competing players,” he said, adding that the firm had concerns that once Everything Everywhere was in a position to offer LTE services, it could attempt to delay the 4G auction, while it had a monopoly position for LTE in the UK.

Vodafone UK CEO Guy Laurence accused Ofcom of “taking leave of its senses”, by accepting the application from Everything Everywhere.

“The regulator has always stressed that competition is in the best interests of consumers and the British economy, yet here it is all but agreeing to grant the largest player in the market a headstart on the next generation of mobile internet services,” he said.

“This decision leaves Everything Everywhere free to prevent anyone else from launching 4G services, by bogging next year’s auction down in endless litigation.”

Meanwhile, 3UK is understood to be discussing its stance in London today, but Matthew Howett, analyst at Ovum, believes the operator would be up in arms over the decision.

“Three are likely to be most critical of Ofcom’s proposal given their 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,” he said.

“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.”

Ofcom has responded to the concerns by allowing the operators more time to submit their opinions in writing, from 17 April 2012 until 8 May 2012.

“We have decided to extend this period following requests from stakeholders for more time to respond,” the regulator said.