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Three UK Launches Fun Public Campaign for a 30% Mobile Spectrum Cap

Monday, November 28th, 2016 (8:33 am) - Score 4,568
make_the_air_fair_sharon_white

Mobile operator Three UK has taken a leaf out of TalkTalk’s “Fix Britain’s Internet” book and launched a new campaign (‘Make the Air Fair‘), which adopts the image of Ofcom’s CEO, Sharon White, and calls on her to impose a spectrum ownership cap of 30% that would hit EE (BT) and Vodafone.

At present EE (BT) own 45% of all the available mobile (2G, 3G, 4G) spectrum and that gives them a big advantage (network capacity, speeds, coverage etc.), while Vodafone holds 28%, O2 has 15% and Three UK are stuck in last place with a measly 12%.

Mobile operators Three UK and O2 had hoped to tackle this imbalance by merging, but Ofcom and the EU competition regulator blocked the deal out of fear that it would result in higher prices (here). As a result Three UK, which owns the least spectrum but claims to handle 39% of all mobile traffic, needs to improve its spectrum holdings and thus boost their competitive position.

The regulator, Ofcom, is at least wise to the concern and admits that EE has more spectrum than is fair. As a result they recently imposed a restriction on the forthcoming auction of radio spectrum in the 2.3GHz and 3.4GHz bands (here), which will prevent EE from bidding on the 2.3GHz band but NOT 3.4GHz; this reflects a cap of 255MHz on “immediately useable” spectrum that any one operator can buy.

Ofcom has clarified that 3.4GHz is “not immediately useable, and we believe it is important that operators are given an opportunity to acquire this spectrum so they are able to consider early development of 5G services.” Naturally Three UK weren’t best pleased.

Dave Dyson, CEO of Three UK, said:

“Ofcom exists to promote competition and protect consumers but it has once again shown it is not willing to make the big decisions needed to deliver the best outcome for the UK.

It has allowed BT and Vodafone to stockpile valuable mobile airwaves and put genuine choice for consumers at risk. It made empty promises to the European Commission that it would tackle this issue but it doesn’t have the courage to do so.

The mobile industry is failing customers and Ofcom has showed it has no interest in addressing that. A 30% cap on total spectrum ownership and a spectrum reservation for smaller operators are the only measures that will preserve competition for the benefit of UK mobile consumers.”

However Three UK’s demand of a 30% cap would create both significant challenges for the future potential of EE to bid fairly for the necessary 5G spectrum and limit the money earning potential of Ofcom’s auction, which probably wouldn’t please the Government.

Meanwhile opponents suggest that Three UK has more than enough money behind it (i.e. parent CK Hutchison Holdings) to splash some cash on a good chunk of spectrum and they’ve had plenty of opportunities to do that in the past too, but haven’t. Had some concessions been extracted from the earlier merger of BT and EE then this might never have become such an issue.

As it stands all of the arguments have some merit and Ofcom is trying to find the best balance, but Three UK isn’t waiting. Instead they’ve launched a new ‘Make the Air Fair‘ campaign, which is supported by Cityfibre, Gamma, TalkTalk, FCS and Relish Wireless (i.e. many of the same friends from the earlier ‘Fix Britain’s Internet’ campaign against Openreach). However O2 has not put its name down.

The campaign website features a comical illustration of Ofcom’s CEO, Sharon White, dressed as a super hero (aka – Consumer Champion) and flying through the air. We’d give a lot of money just to be a fly on the wall when she sees that this morning. The campaign then calls upon people to sign a form that supports their demand for a 30% cap.

Chris Pateman, CEO of the Federation of Communication Services, said:

“In every other market, business people are used to having a choice of good services from a variety of suppliers. But mobile telephony depends on those competitors all having enough radio spectrum to offer their services over. Unfortunately, the UK market doesn’t currently have that balance.

Ofcom tried to force competition into the market when they auctioned off the 4G spectrum in 2012, by deliberately reserving one of the blocks for a new entrant. BT bought that block of spectrum, did very little with it, and subsequently acquired Everything Everywhere, which was already the UK’s biggest mobile operator.

The present distortion in mobile availability risks making the whole telecommunications sector look amateurish and old-fashioned. We owe it to Government and business to deliver real choice and proper competition for the high quality voice and data connections upon which they rely to trade in the modern world.”

However a spokesperson for Ofcom said that the UK market remains “among the most competitive in Europe” and “has been serving customers well.” The regulator added that their approach to future spectrum auctions would also ensure that competition and innovation are “safeguarded” and they’d “welcome evidence from all parties before we finalise our decisions,” concluded Ofcom.

The regulator’s consultation on their forthcoming 2.3GHz and 3.4GHz auction is due to end on 30th January 2017.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
5 Responses
  1. Avatar Matthew Williams

    Err wasn’t it Three who got the reserve block of 800MHz spectrum far as I remember there was no reserved 2.6

  2. Avatar TWKND

    Three seem to spend more money on complaining than they do on their actual network. They still have the smallest 4G network by far.

  3. Avatar New_Londoner

    I guess it’s cheaper to complain and lobby politicians that, you know, spending money bidding for spectrum and building networks. Those who can do, those who can’t be bothered complain instead.

    Sad really, we need some politicians with a bit of backbone to slap these serial complainers down (TalkTalk, Vodafone, Sky and now Three) and press them to invest. Glad I move from Three a few weeks ago.

    • Avatar dragoneast

      Like Donald Trump, hey?

      Well if suppose if they must start off a cartoon debate. We do all seem to be immune to reason.

  4. Avatar GNewton

    @New_Londoner: “press them to invest” So you finally agree companies should invest their own money into these telecom infrastructures, and not act like a beggar asking for taxpayer’s money?

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