Three tempted to use Everything Everywhere 4G?
Three mobile has not ruled out using its joint venture connections Everything Everywhere’s (EE) to perhaps squeeze in on its 4G mobile network; assuming EE gets clearance from Ofcom.
EE (owner of Orange and T-Mobile) had applied to Ofcom to launch 4G services on its spare 1800MHz spectrum, months ahead of the year end spectrum auction. It is already performing live tests of 4G in Cumbria.
Ofcom has tentatively said yes, and consulted on the issue until this week. Needless to say, competitors Vodafone, O2 and Three itself were less than pleased.
Despite this, Three CEO David Dyson said that he wants 4G to go ahead as soon as possible, ‘as long as the auction is fair’. It was previously meant to occur under the Gordon Brown administration, and has been subject to endless bureacratic delays and legal threats.
He declined to give CBR any projections on the company’s individual 4G roll out plans.
However, if EE did get Ofcom’s blessing, he didn’t rule out negotiating with EE to gain access to its 4G, perhaps through its existing networking sharing agreement.
Three and EE have a joint venture company, MBNL. MBNL was created after T-Mobile and Three UK agreed to pool their respective 3G infrastructures in a 50/50 joint venture. This is also intended to work for 4G infrastructure post auction.
Content from our partners
While much of MBNL’s work has been in sharing mobile backhaul, Dyson said he has had no formal discussions on 4G sharing yet, but added "we’re open to the suggestion."
"Our relationship with Olaf Swantee [Everything Everywhere’s CEO] on MBNL is as strong as its ever been," he said.
Dyson has been positioning Three as the most modern of UK mobile networks, after a few years of growing pains. It has positioned itself as a ‘data first’ mobile phone network, which matches user trends over the last few years – driven by iPhone and iPad growth.
Dyson claims that, after years in the wilderness, his company has the best mobile network data performance. It currently consists of around 12,600 mobile radio sites nationwide, 80% of which are now Ethernet.
The Ethernet penetration is particularly important, given scalability and futureproofing, especially when compared to the dated E1 technology. Its safe to say Three is positioning itself well to offer 4G once they have the spectrum to do so.
The company estimates an average download speed of nearly 3Mbps now, double what it was in first quarter 2010. The company is aiming for 18,000 sites and more than 95% Ethernet backhaul by 2015.
The average monthly data usage of a Three Mobile customer is now 800MB, four times what it was a year ago. This has been tied to the success of its data heavy ‘One Plan’. The company’s traffic and subscriber base really took off after obtaining iPhone 4S (September 2011) – which saw traffic go from around 3 million GB to nearly 7 million GB today. 35% of the network’s traffic is media consumption. The company’s plan is to double its customer base in 3 years, to 10 million customers.
Needless to say for any data centric mobile business, 4G is vital. It may even be the great market equaliser, as incumbents Vodafone and Telefonica (O2), are saddled with legacy 2G and 3G offerings – while EE and Three focus on 4G, purchasing these legacy techs as they require them.
Interestingly, EE, as part of the Orange-T-Mobile merger agreement, have to sell 25% of its 1800MHz spectrum, which Three could also buy. Dyson did not comment.
The problem is, Ofcom has set aside some low frequency spectrum for Three in the year end auction as part of its aforementioned mandate to level the playing field (which Vodafone and O2 have also cried foul about). Buying this spectrum would void this deal – leaving them to compete with the big bidders for the remaining prime 4G spectrum.
However, if EE is cleared by Ofcom to launch 4G early, Three could buy this 25% share, make the same proposal to Ofcom, arguing precedent and join EE – leapfrogging O2 and Vodafone.
Three in particular is still fuming over Ofcom’s decision to liberalise 2G spectrum in January 2011, which allowed the old guard to transfer their existing 2G spectrum to 3G usage. New entrants, such as Three, were disadvantaged, being a 3G generation company.
It will happily throw this argument into the mix with large puppy dog eyes.
Further Reading:
CBRs feature on the 4G spectrum auction – Special Report: UK 4G – a disaster waiting to happen?
