By: MarkJ - 24 November, 2009 (9:07 AM) - Views: 1103 - Categories: Mobile Broadband

Deutsche Telekom and France Telecom, which recently signed an agreement to combine their UK operations ( T-Mobile and Orange ) into a 50:50 joint venture company, are refusing to hand over any of their radio spectrum (170MHz total) for use by rival Mobile Broadband operators and services.

The move is unlikely to sit well with regulators, especially Ofcom, which will not be pleased with the merged company having around 37% of the market and over half of all available spectrum. The pre-merge Independent Spectrum Broker's (ISB) report suggested that spectrum ownership could be capped at 120MHz, which is now the subject of a wider consultation.

However the Office of Fair Trading (OFT) has already hinted that it might not force the merger to undergo a competition review, which would effectively fast track the deal to completion. Meanwhile Ofcom is likely to scrutinise the deal in an effort to prevent consumer harm, which could include forcing some spectrum to be relinquished.

It's worth remembering that there will probably be a General Election before any of this is resolved, which could add additional confusion to an already legally and politically difficult situation. We doubt Vodafone and O2 would be keen to give up any of their prime 900Mhz band for Mobile Broadband if T-Mobile/Orange don’t share what they have. Suddenly we’re back where we started over one year ago.