British mobile network operators have moved one step closer to bidding for new wireless spectrum after the UK government laid down a statutory instrument requiring telecoms regulator Ofcom to launch a combined auction of frequencies in the 800MHz and 2100MHz band ‘as soon as possible’. According to the Financial Times, the government is aiming for the sale to take place before the end of 2011, with Ed Vaizey, the UK’s communications minister, noting: ‘Under our plans, our mobile industry will have access to the 21st-century infrastructure it needs to give UK consumers the latest technologies and even better coverage for broadband on their mobile phones.’ As per the state’s plans, operators will be permitted to refarm existing 2G spectrum that they hold in the 900MHz and 1800MHz bands for new 3G services. Additionally it has been confirmed that existing 3G concessions will be extended indefinitely, although those in possession of concessions will still be required to pay an annual licence fee.
O2 UK, which in May 2010 lodged an appeal with the Competition Appeal Tribunal (CAT) alleging that Ofcom had failed to consider its request related to the reuse of old spectrum for 3G services, welcomed the moved. However, the UK’s smallest wireless operator by subscribers, Hutchison 3G UK (H3G UK), has argued that the move could impact competition in the sector. ‘It is critical for UK consumers that in setting out the auction process Ofcom addresses the distortions now created by allowing the incumbent operators to retain full access to 2G spectrum,’ said Kevin Russell, chief executive of H3G UK, adding, ‘Competition puts mobile broadband into the hands of millions, without it service quality and price will be jeopardised.’