UK Mobile Operators Temporarily Halt Legal Threats to Ofcoms 4G Auction

Everything Everywhere (Orange UK and T-Mobile), O2, Vodafone and Three UK have agreed, under direct pressure from the government, to stall any legal challenges that could have resulted in further delays to Ofcom’s auction of the superfast “4G” mobile broadband compatible 800MHz and 2.6GHz bands.

The situation erupted again last month after Ofcom approved a request by EE to re-purpose its 1800MHz spectrum for use by LTE technology, which would have allowed the operator to launch 4G services before the end of 2012 and roughly one year ahead of their closest rivals (here).

At the time EE was able to placate some of Three UK’s concerns by agreeing to sell them a slice of its 1800MHz radio spectrum (note: Three UK isn’t able to use this until late 2013). Meanwhile O2 UK (Telefonica) gave notice of its plan to lodge a challenge against Ofcom’s decision at the Competition Appeals Tribunal (CAT) and warned EE not to launch 4G in 2012.. or else (here).

In response EE warned that any litigation against Ofcom’s decision would result in the operator needing to review its current position of support for the auction process. On top of that Vodafone claimed that Ofcom was showing a “careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created“.

An article in the Financial Times now suggests that the UK government managed to step in last week and hold a semi-successful meeting of bosses from all of the main mobile operators, which resulted in everybody agreeing to delay legal challenges for a “cooling-off period” (roughly one month or more) while a “collective way forward” is debated. During this time EE has agreed not to roll-out its new 4G service over 1800MHz, although that’s unlikely to prevent their soft launch of related services from occurring later today.

Last year saw the UK government’s former Culture Secretary, Jeremy Hunt MP, warn that, “Mobile phone operators must put aside competitive differences and work together in their common – and our national – interest to make [the 4G auction process] happen” (here); as usual the government stopped short of threatening any legislative intervention. Asking mobile operators to “put aside” their “competitive differences” is always going to be quite a difficult task, especially in a competitive market where private companies are expected to do the exact opposite.

The question now will be whether or not the industry can agree a common solution. A similar situation two years ago ended with little progress.