The results of Kip Meek’s highly awaited spectrum report hardly held the good news Orange and T-Mobile had hoped to hear – that Vodafone and O2 would be forced to share some of their highly valued 900MHz spectrum.
For all the talking that’s happened, it doesn’t appear that much has changed in the latest proposals – the two networks in possession of the spectrum that is in the most demand (and, according to Orange, holds the key to bringing broadband to the farthest reaches of the country as per the goals of the hotly discussed Digital Britain report) still retain control.
The proviso – that they be banned from bidding for 800MHz when it becomes available after the ‘digital dividend’ in 2012 – is, frankly, weak and if anything encourages these two networks even moreso to keep hold of the 900MHz. Why would they go through all the bureaucracy of trading for 800MHz, that has very similar properties to the 900MHz that they already have and if you ask them, are very happy with, thank you very much. Especially when they won’t be faced with any restrictions when it comes to the 2.6GHz WiMAX spectrum that will come up for auction later this year.
But the most interesting implications are for 3 and the possibility of a new entrant entering the mobile market. Meek has proposed that 3 be free to bid for whichever spectrum is available. The only obvious drawback is that, as it appears likely that Vodafone and O2 won’t give up any 900 unless they are legally forced to, that 3 would have to wait until 2012 to grab some 800 and therefore wait to continue rolling its network out at a lower cost than that based on higher frequencies.
As for a new market entrant, in theory, the conditions would be there. But it’s another story as to whether the UK can sustain another network. 3’s challenger effect might be starting to wear off. Perhaps and we could do with another player to shake things up again. But there might not be enough new business. Judging by the speed that the spectrum allocation issue has moved at, it would be a good few years before we could expect any new entrant to appear.