The UK’s telecoms regulator, Ofcom, has announced that it has liberalised spectrum in the 900MHz and 1800MHz bands, allowing operators to offer 3G services using both frequencies. Existing licences have been updated with immediate effect, the watchdog said. The move comes after Ofcom in October 2010 performed something of a volte face when it said that it did 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).
Ofcom subsequently published a notice proposing to vary concessions related to the spectrum bands in question on 28 October 2010, which called for it to: vary the licences for 900MHz and 1800MHz spectrum to permit use of the licensed frequencies for both GSM and UMTS; to ensure compliance with technical parameters in the Annex to the RSC Decision 2009/766/EC; to vary the licences for 900MHz and 1800MHz spectrum to extend the period of notice for revocation for spectrum management reasons from one year to five years; and make the relevant licences tradable.
While the regulator has altered licences to allow for 3G services, a number of the proposals are still under consideration. Ofcom noted that it is currently preparing a consultation document in respect of making concessions tradable, with plans to publish this in early 2011. Further, in response to a request by Everything Everywhere that it indicate as soon as possible when it will review the annual licence fees for the 900MHz spectrum, Ofcom noted that, as it must review the fees after the completion of a spectrum auction expected in the first half of 2012, it did not consider it ‘would be a good use of its limited resources to undertake a prior review in the interim’.
Also notable is that a number of respondents to the consultation regarding the spectrum liberalisation, including the likes of Huawei and Samsung, called on Ofcom to make licences fully technology neutral. The regulator for its part has said that it ‘does intend to liberalise the 900MHz and 1800MHz spectrum for other systems such as Long Term Evolution (LTE) and WiMAX when the European work on defining appropriate technical conditions has completed’. It said that it expects to make such changes ‘in the course of 2011’.
Meanwhile, the response to the developments from one of the UK’s mobile network operators has been less than enthusiastic. According to Bloomberg, the market’s smallest operator by subscribers, Hutchison 3G UK (H3G UK), has claimed that the changes could distort the sector and lead to further consolidation. ‘Ofcom and the government are jeopardising the whole competitive environment that the 3G auction in 2000 started to establish … If the government and Ofcom get this wrong, further consolidation could result,’ noted Kevin Russell, H3G UK’s CEO.