Rival network operators have hit out at communications regulator Ofcom’s decision to allow Everything Everywhere (EE) to using its existing 1800MHz spectrum, which it currently uses for 2G services.
O2, Vodafone and Three expressed concern about the move when EE requested regulatory approval from Ofcom in February.
The other players in the market will have to wait for UK’s 4G auction, which is scheduled to begin before the end of 2012 and will allow them to bid for 800MHz and 2.6GHz spectrum. However, it is unlikely that Long Term Evolution (LTE) networks, which will operate this spectrum for 4G services, will be rolled out by these players before mid-2013.
An O2 spokesperson said: "We are hugely disappointed with today’s announcement, which will mean the majority of consumers will be excluded from the first wave of digital services. This decision undermines the competitive environment for 4G in the UK."
Meanwhile Three, the smallest player in the market, referred to Ofcom’s decision at the beginning of last year, where it introduced new measures that allowed networks to refarm 2G airwaves for 3G services.
The larger networks had spare 2G spectrum and have been able to extend their capacity for 3G roaming as a result. However, Three did not have any spare spectrum and consequently is looking to obtain 4G spectrum as soon as possible.
A Three spokesperson said: "Liberalisation of 2G spectrum to date has distorted the competitive landscape in the UK, which ultimately harms consumers. Further liberalisation without addressing competition issues could make that distortion worse."
However, Vodafone has launched a particularly scathing attack on the regulator, claiming that it is Ofcom itself that is standing in the way of getting 4G services to the UK, due to a number of delays to the auction process.
It also said that the decision is "bizarre", given that EE is reportedly very close to sealing a deal with Three to sell it some of its old 2G spectrum, which was part of the agreement when T-Mobile and Orange merged to become EE.
“We are frankly shocked that Ofcom has reached this decision. The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market,” said a Vodafone spokeswoman.
"Ofcom’s timing is particularly bizarre given the reports that Everything Everywhere is currently in discussions to sell some of its spectrum to Three, which Ofcom has previously been at such pains to protect with its over-engineering of the 4G auction. This means the balance in the auction will fundamentally change."
The spokeswoman went on to say that Ofcom has “spent several years refusing to carry out a fair and open auction” and this decision now means that EE and Three had “massive incentive to further delay it”, providing the sale of 1,800MHz to Three goes through.
"We firmly believe that a fully competitive market for 4G services is in the best interests of Britain. We have already committed ourselves to reach 98 percent of the UK population with indoor 4G services by 2015 – two years before Ofcom’s own target – but we need to acquire spectrum in the auction to achieve this. Ironically, all that stands in our way right now is the regulator,"she said.
However, EE did confirm that when it initially requested approval from Ofcom that not all of its customers will benefit from the faster services immediately. An EE spokesperson said that the rollout of 4G services will occur on a “region by region” basis, and no details of timelines could be provided.
Computerworld UK contacted Ofcom for a comment, but the regulator declined to respond to Vodafone's accusations.