Digital Britain hinges on Voda, O2

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Orange said last week it will fail to deliver on the Government’s Digital Britain plan if Vodafone and O2 do not cede part of the 900MHz spectrum they occupy.

Orange UK head of spectrum strategy Steve Blythe told Mobile News Orange’s 3G rollout in support of the Digital Britain scheme, to provide all UK residents with minimum mobile broadband speeds of 2Mbps by 2012, relies upon it taking a share of the 900MHz band.

“The lower the frequency, the further it travels and the broader area it covers, with fewer base stations. So Vodafone and O2 can expand their networks into rural areas at a lower cost; Orange can’t. Without access to 900MHz, we can’t deliver on Digital Britain,” said Blythe.

Orange UK vice president of strategy Nicolas Ott added: “One of our key proposals for Digital Britain is we will extend our network to offer minimum 2Mbps broadband to 98.5 per cent of the population, provided we are given 900MHz spectrum. We are asking the Government to be very clear in its regulatory framework regarding the distribution of spectrum.”

Blythe said Orange cannot wait for Ofcom to release the 800MHz spectrum band which comes available in 2013 with the switch-off of analogue television if it is to meet the Government deadline of 2012.

He said: “900MHz could be available this year. The analogue that will be freed up will not be ready until 2013. This represents a four-year difference in terms of what Vodafone and O2 could plan and do with their 900MHz spectrum. This four-year delay will have an adverse impact on our business.”

As it stands, Vodafone and O2 have exclusive legacy holdings of the 900MHz band. T-Mobile, which like Orange runs off 1800MHz at present, and 3, which utilises the 2100MHz spectrum, are also pressuring regulator Ofcom to free up 900MHz bandwidth.

O2 led meetings last week with Digital Britain consultant and former Ofcom executive Kip Meek, as well as Vodafone and Orange, to thrash out a satisfactory resolution to the proposed redistribution of UK mobile spectrum.

The Digital Britain scheme relies upon operators maintaining rollout of their 3G networks, which in some cases stand at just 80 per cent population coverage and fall down in rural areas.

Ofcom competition policy director David Stewart told Mobile News  Ofcom will intervene if operators cannot agree a resolution. “There is a possibility that the playing field is not level and if there is not a solution within Digital Britain, it will fall to us to regulate,” he said.

Ofcom originally proposed Vodafone and O2 should relinquish a 15MHz block of the 900MHz band between them. Ofcom’s proposal has since shifted, with Vodafone and O2 slated to hand 2.5MHz back. Orange branded the idea “wholly unacceptable” since only one operator would be able to take advantage of the allowance.

The solution currently put forward is to allow Vodafone and O2 to keep the 900MHz spectrum, and allow other networks exclusive access to the 800MHz that will come available in 2013.

Mobile News also understands that Vodafone is reluctant to step back from the 800MHz distribution.

Vodafone has been accused of control freakery by rovals. One  network source said: “Vodafone has not got into the spirit of trying to resolve the issue. It doesn’t like the new suggestion to leave 800MHz to rivals because it wants control over everything.

“The problem is partly because Ofcom’s proposals were so poor, with not enough spectrum to use efficiently. Ofcom’s proposals in their current form are of little practical use. But it is moving out of Ofcom’s hands and directly into the Government’s, and it’s still not entirely clear what is happening.”

A spokesperson from the Department for Business, Enterprise and Regulatory Reform, which is responsible for the Digital Britain report, said: “Discussions are ongoing. Kip Meek is due to make a presentation to us shortly. Until then we can’t comment.”

Vodafone declined to comment except to say: “The operators are having individual discussions regarding spectrum issues. This constructive dialogue is ongoing and Vodafone is actively participating. However, we have decided that we won’t be making comments about the discussions or Vodafone’s response at this stage.”

An O2 spokesperson said: “We want to see the UK continue to benefit from a world leading digital economy and we share the view of Government that it is better for all concerned to reach an industry-agreed solution on spectrum. We are still fully engaged in discussions with Kip Meek, which are progressing well. We do not propose to hold any negotiations in public.”

T-Mobile also said it did not wish to comment until it had further clarity on the Government’s proposals.

The final Digital Britain report is scheduled for June.

 

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