Three of the UK’s mobile network operators – Orange UK, T-Mobile UK (both of which are now part of joint venture Everything Everywhere) and Hutchison 3G UK – have claimed that regulator Ofcom has ‘distorted competition’ by allowing rivals O2 and Vodafone to use existing spectrum allocations in the 900MHz band to offer 3G services. According to the Financial Times, the trio have pointed the finger at regulator Ofcom after it gave permission for spectrum refarming in both the 900MHz and 1800MHz bands in January 2011. With O2 and Vodafone both having already kick started programmes to re-use 2G spectrum for UMTS services in some of the country’s main cities, H3G UK has claimed that the duo has gained a ‘dramatic leg-up’ against their rivals. Richard Moat, finance director at Everything Everywhere meanwhile pointed to the fact that, while it has permission to reuse spectrum it holds in the 1800MHz band for 3G services, there are no smartphones that function on that frequency. H3G UK and Everything Everywhere have both pointed to Ofcom’s decision to abandon a proposal made back in 2007 which would have required that O2 and Vodafone hand back a portion of their holdings in 900MHz band in order that it be used by other operators. The lower frequency spectrum is seen as more valuable due to the fact that it allows signals ti be transmitted over longer distances.
In response, Graham Louth, director of spectrum policy at Ofcom, has rejected the claims, arguing that the regulator’s planned auction of spectrum for next year, which is expected to include both 800MHz and 2600MHz frequencies, meant that it did not have ‘long-term concerns about competition.’ Commenting on the matter Mr Louth said: ‘The only reason we feel it’s safe to liberalise the [900MHz] spectrum now is because the 800MHz and 2600MHz spectrum will be available in the not too distant future.’