UPD Three UK Buy 4G Friendly 1800MHz Spectrum from Everything Everywhere

Mobile group Everything Everywhere (Orange UK and T-Mobile) has agreed to sell some of its prized 1800MHz radio spectrum to rival Three UK, which could theoretically allow the operator to launch its own superfast “4G” (Long Term Evolution) based Mobile Broadband services before the end of 2012.

The European Commission (EC) requires, as a condition of the original Orange UK and T-Mobile merger in May 2010, Everything Everywhere to sell off 2 x 15MHz of its 1800MHz spectrum to a rival operator in order to satisfy competition concerns.

Ofcom’s controversial decision to allow 4G over the 1800MHz band (here) has also added both extra value and significance to the announcement and means that Three UK could now join Orange UK and T-Mobile in launching the next generation of Mobile Broadband services at least a year ahead of their main rivals. Well maybe..

Everything Everywhere Statement (Techradar)

“In accordance with these commitments, Everything Everywhere has today announced an agreement with Three [to transfer the spectrum]. Ofcom and the European Commission will review whether the divestment satisfies the merger commitments and a response is expected within the next three months.”

It will be interesting to see whether or not today’s announcement will have any impact upon the forthcoming auction process. A slice of the 800MHz band was supposed to be set aside for Three UK or another new entrant to the market, yet the operators ownership of 1800MHz could change their competitive position. Three UK itself has already said that the new band will help it to “more than double the capacity available to customers on our network“.

In reality Ofcom will probably have been forewarned of today’s announcement and likewise it’s not exactly a surprise; Three UK, T-Mobile and Orange UK already work closely together as part of a massive network sharing arrangement via Mobile-Broadband Network Limited (MBNL). As a result of that, and the fact that the price set by EE for 1800MHz could have an impact on the cost of 800MHz and 2.6GHz in Ofcom’s forthcoming auction, many suspect that Three UK will have also paid less than the £400m+ some had estimated.

Much will now depend upon how long it takes to reach final approval of the sale and whether or not Three UK can adapt its network in time (early 2013 might be a more feasible target). In any case 1800MHz isn’t that well supported among 4G supporting Smartphone’s. The 800MHz band is still considerably more important given its strong support, wider coverage and thus lower deployment costs.

UPDATE 12:25pm

Reports indicate that EE will not physically release the spectrum itself until September next year, which is the latest date require by Europe for EE to divest some of its 1800MHz band. In other words EE will still get a head-start on everybody else with 4G and Three UK will just have to wait.