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August 21, 2012

Ofcom Shocker: UK to get 4G LTE mobile in 2012

Everything Everywhere has been cleared by Ofcom to launch 4G LTE services on its existing mobile spectrum, giving it the jump on competitors who have to wait till 2013.

By Allan Swann

This means that Everything Everywhere (EE), which runs T-Mobile and Orange in the UK, will be able to launch 4G later this year, instead of in 2013 as originally expected.

This now means that EE can refarm its existing 1800Mhz spectrum, which is being used for old 2G and 3G services to provide 4G LTE services, as Ofcom decreed that "EE’s 1800 MHz licences now will deliver significant benefits to consumers, and that there is no material risk that those benefits will be outweighed by a distortion of competition."

EE has been issued a license that takes effect from 11 September, although the decision remains a commercial one – the company hasn’t specified a date beyond ‘later this year.’

"Ofcom’s decision to make 4G available this year is great news for the UK. Consumers will soon be able to benefit from the much greater mobile speeds that 4G will deliver. 4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK," said an EE spokesperson.

4G - finally a UK reality?
4G – finally a reality in the UK?

The 4G spectrum auction has long been a source of bickering between the various mobile service providers and regulator Ofcom, which saw the original auction date pushed back from the days of the Gordon Brown administration, to an unspecified date later this year.

This auction would see the 800Mhz and 2.6Ghz bands put up for auction, but Ofcom has struggled to outline an auction system of ensuring smaller players, such as Hutchison-Whampoa’s Three network get a fair showing.

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While EE’s nearly year-long pressure PR campaign on Ofcom has finally come to fruition, EE’s competitors are less than pleased.

"We are frankly shocked that Ofcom has reached this decision. The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market," said a Vodafone spokesperson.

"The regulator has spent several years refusing to carry out a fair and open auction. Now its decision today has granted the two most vociferous complainants during that entire process a massive incentive to further delay it."

O2, Telefonica’s UK arm, was similarly shell shocked.

"We are hugely disappointed with today’s announcement, which will mean the majority of consumers will be excluded from the first wave of digital services. This decision undermines the competitive environment for 4G in the UK," said an O2 spokesperson.

Ofcom’s timing is somewhat odd given that just a month ago it had finalised the rules for the 4G spectrum auction, and had stated that it looked forward to seeing 4G in 2013. This also saw Three Mobile received ring fenced spectrum in the auction, provided it did not make a purchase of EE’s additional spectrum.

Three already has a network share agreement with EE through MBNL, and was in negotiations to purchase some of EE’s spectrum, which it had been required to give up as a condition of the merger of T-Mobile and Orange’s networks in 2010.

The liberalisation of 2G spectrum (which allowed it to be converted to 3G) provided a massive benefit to the major operators in 2009 – which Three, as the newest operator, felt disadvantaged. It may feel this is happening all over again, and even threatened to pull out of the UK.

"Liberalisation of 2G spectrum to date has distorted the competitive landscape in the UK, which ultimately harms consumers. Further liberalisation without addressing competition issues could make that distortion worse," a Three spokesperson said.

Three has also been attempting to leverage its working arrangement with EE to perhaps piggy back onto its 4G, to get a leg up on O2 and Vodafone.

Despite claims from Vodafone that the Government supported a 4G auction at year end, political frustration has been mounting as Cameron’s Government has placed a focus on making the UK a tech hub. Most other developed nations launched their 4G networks in the last 2 years, leaving the UK severely lagging.

Secretary of State for Education Michael Gove showed his support for EE’s trial in Cumbria, as did local MP Rory Stewart. Even Labour has lashed out at the endless bureaucratic delays in rolling out 4G, by both public and private institutions, claiming it costs the economy £1m a day.

It is estimated that 4G LTE could boost the economy by as much as £75bn a year and create 125,000 jobs.

Further Reading:

Blog – ‘Why Ofcom has made the right decision on 4G’

 

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