3G deal offered to mobile operators

27 Jan 2009

British broadsheet The Times is reporting that mobile operators including Vodafone and Orange may be allowed to retain their 3G licences indefinitely if they commit to follow spending plans put forward by the communications minister Lord Carter. It is believed that the offer has been made in a bid to quell concerns over the cost of introducing a universal obligation to provide every home in the UK with a 2Mbps broadband connection. The obligation is one of the key elements of Lord Carter’s Digital Britain report. Industry estimates have suggested that in order to provide such a service to 99.5% of the population it would cost up to GBP2 billion (USD2.75 billion), a cost that would have to be met by operators.

With the government also trying to encourage a further GBP5 billion investment from operators in new fibre-optic networks, the licence deal is seen as a means of offsetting costs. The five UK-based 3G operators – Orange, Vodafone, O2, T-Mobile and 3 – spent a collective GBP22.5billion on their 20-year 3G licences.