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October 4, 2016

Three, TalkTalk demand Ofcom curbs BT spectrum dominance

Ofcom is auctioning 190MHz of mobile spectrum in 2017.

By Alexander Sword

Rivals of BT and Vodafone have banded together to demand Ofcom limit the amount of mobile spectrum they can own.

The open letter to Ofcom CEO Sharon White asks the regulator to set a 30 percent cap on the amount of spectrum that a single operator after the next spectrum auction of 190MHz in 2017.

The signatories, including the CEOs of Three, TalkTalk, CityFibre, Relish and the Federation of Communication Services, claim that this is the only way to prevent increasing domination of the mobile market by BT and Vodafone.

Ofcom

Sharon White, Ofcom CEO.

“Failure to tackle the imbalance will see consumers suffer the misery of higher prices for a poorer service at a time when mobile’s importance to the digital economy has never been greater.”

The letter states that BT currently owns nearly half of the UK’s spectrum and Vodafone nearly a third.

The rule would mean BT, for example, would have to sell existing spectrum to buy new spectrum. The cap would primarily disadvantage the two largest operators.

Since BT and Vodafone already “sit on large amounts of unused spectrum”, according to the letter, the failure to implement a cap could see this situation worsening.

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“A cap at this level will allow a competitive bidding process among existing operators and new entrants and provide a fair return to the public purse,” the letter says.

“Ofcom must therefore act to implement a cap of 30% to fulfil its duty to protect consumers and allow competition to thrive,” it concludes.

Ofcom

Signatories of the Ofcom letter.

At a press event in September, Three CEO David Dyson said that Ofcom had not been willing to do enough to increase competition in the telecoms market.

He said that Ofcom does a good job within the parameters available, but suggested that the regulator is cowed by the large legal teams of the big operators into taking fewer risks.

For example, efforts to reform issues around number portability, which would allow customers to switch more easily between networks, have been mired in battles with the big operators.

“I’m confident that there will be some competition measures, but not confident that they will stick their neck out enough,” said Dyson.

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