Ofcom reverses previous stance on 900MHz/1800MHz spectrum refarming

28 Oct 2010

The UK telecoms regulator Ofcom has reportedly ruled that it does not believe the refarming of spectrum in the 900MHz and 1800MHz bands would impact competition. In a paper summarising its advice to the Secretary of State for Business, Innovation and Skills regarding spectrum liberalisation the regulator said that allowing 3G services to be delivered using 900MHz and 1800MHz frequencies offered a number of benefits including: greater network capacity, allowing more customers to be served and to enjoy higher mobile broadband speeds (with regards to both the 900MHz and 1800MHz bands); improved coverage quality and consistency (900MHz band); improved in-building coverage (900MHz band); and wider coverage of rural areas (900MHz band). Noting that a number of European markets already have cellcos operating UMTS networks using 900MHz spectrum Ofcom said that ‘it is imperative that decisions are taken quickly allowing this spectrum to be liberalised for UMTS use,’ also noting that the UK is required to liberalise this spectrum for UMTS use by two pieces of European legislation – the amended GSM Directive and the associated Radio Spectrum Decision.

This latest decision reverses a previous finding by the regulator, which in February 2009 argued that ‘liberalising 900MHz spectrum in the hands of the incumbent holders, without constraint, could lead to competitive distortion and/or inefficiencies for around two to four years, until services using 800MHz spectrum could offer a competitive constraint.’ Ofcom noted that its latest findings took into account the recent merger of mobile operators T-Mobile UK and Orange UK as a joint venture under the Everything Everywhere banner in addition to updated technical analysis, prompting it to state that: ‘Overall we now consider the risk and extent of any competitive advantage for O2 or Vodafone arising from liberalisation of the 900MHz spectrum for UMTS to be low and significantly less than our analysis suggested in February 2009,’ while with reference to the 1800MHz band it said that there remains ‘little risk of a material competitive distortion arising as a result of liberalising the 1800MHz spectrum for UMTS in the hands of the current holders, without additional conditions.’