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August 21, 2012

Three buys a piece of Everything, Everywhere’s 4G spectrum goodness [updated 5.10pm]

Three Mobile has just jumped into the 4G game, locking out O2 and Vodafone.

By Allan Swann

O2 and Vodafone have been well and truly shut out of 4G this year, as Everything, Everywhere announces it has sold some of its 1800Mhz spectrum to Three Mobile.

[Update 5.10pm]

A Three spokesperson has confirmed to CBR that the liberalisation announcement this morning, and the 1800MHz sale announced this afternoon were not directly related. He would not confirm whether Three had paid a premium for the newly 4G’d 1800MHz spectrum either.

It was confirmed that Three’s move is about expanding capacity, and that this would include 4G services at some point down the road. No dates were confirmed.

Three now has to wait for EE to clear that space before Three can use it. The deadline for EE to do so is 20 September 2013, so effectively EE can keep its first mover advantage through 2012 if it likes.

[Update 4.30pm]
However, Three has not announced its plans regarding any 4G roll out, claiming that it is instead planning to use the added spectrum to expand its existing coverage.

"Acquiring this spectrum will more than double the capacity available to customers on our network. We have seen a huge growth in data consumption with average mobile handset customer usage now more than 1.1GB per month. Three has led the market in the significant growth of mobile data consumption and the shift to consumer use of smartphones to access the internet," said Dave Dyson, CEO of Three.

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"New spectrum, supported by further committed technology spend, is a clear signal that we are committed to maintain our lead as the network built for the mobile internet."

[Original text – 4pm]
Just hours after Ofcom had given Everything, Everywhere (EE) the license to launch a 4G LTE service on its own 1800Mhz spectrum, it has announced that it has sold two lots of 15Mhz to Three Mobile, the UK’s smallest mobile operator. The two companies have an existing network sharing arrangement for 2G and 3G services through MBNL.

"As part of the commitments given when the European Commission approved the merger of Orange and T-Mobile in the UK in March 2010, Everything Everywhere was required to divest 2X15MHz of its 1800 MHz spectrum," said a EE spokesperson.

"In accordance with these commitments, Everything Everywhere has today announced an agreement with Three to transfer this 2×15 MHz of its 1800MHz spectrum to Three. Ofcom and the European Commission will review whether the divestment satisfies the merger commitments, and a response is expected within the next three months."

Did Three just join the 4G club?
Did Three just join the 4G club?

Everything, Everywhere is the joint venture between France Telecom and Deutsche Telekom, which runs T-Mobile and Orange in the UK. The disposal of EE’s spectrum was part of the European Commission’s requirement to allow the merger to occur in 2010.

The European Commission will still need to review and determine whether this sale satisfies its conditions. Given Three is the smallest operator, this shouldn’t be a problem.

An Ofcom spokesperson confirmed to CBR that, due to this morning’s decision to liberalise EE’s 1800Mhz band for 4G LTE, the two lots sold to Three Mobile are now available for 4G LTE use also.

This effectively means that Three Mobile can now launch 4G services this year, leaving Vodafone and O2 stuck waiting for Ofcom’s 800Mhz and 2.6Ghz 4G spectrum auction at year end.

The sale is also below the minimum threshold for Three, which means they don’t breach the terms of Ofcom’s ruling concerning its ring fenced spectrum for ‘a fourth operator.’ This means Three will still be able to bid on protected lots within the 800Mhz, 1800Mhz and 2.6Ghz spectrums at the year end auction.

Further Reading:

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

Why Ofcom has made the right decision

4G Auction Outline

Special Report: UK 4G – a disaster waiting to happen?

Government supports new Everything Everywhere 4G test ahead of Ofcom decision

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