Operator chief appeals to all parties involved to work together to create a simple spectrum auction and avoid 4G delay
O2 has appealed to rival networks and all parties involved to cooperate to avoid delay in implementing LTE and 4G technology in the UK.
It was revealed at the Westminster eForum on the future of mobile that demand for data among consumers is growing at a rate of about 108 per cent per annum, while capacity for this data is growing at a rate of just 12 per cent per annum. Many in attendance at the event agreed that the UK market is heading for a ‘data crunch’.
An auction for spectrum has continued to be delayed, as operators argued over ownership, how infrastructure can be used, and the cost of running a network on different spectrum.
Last month regulator Ofcom released a proposal that will allow operators to trade mobile spectrum with each other, depending on their specific needs. Covering the 900MHz, 1,800MHz and 2,100MHZ frequencies, the proposal – according to Ofcom – would increase flexibility and allow operators to respond more quickly to demand, which is constantly increasing. It also said it would post any proposed trades online, confirming they are acceptable and then issue revised licences to implement the trades.
The announcement was welcomed by all networks apart from Three, which claimed operators are unlikely to want to part with the mobile spectrum they hold, and said the move still does not do enough to make the allocation of spectrum free and fair.
Research from PwC in February suggested operators are likely to purchase spectrum on the 800MHz band for around £1 billion each, when it is auctioned along with the 2.6GHz frequency next year, paying a lot less than the £22.5 billion networks parted with in 2000. The two bandwidths, when auctioned by Ofcom next year, will be used to implement LTE 4G services in the UK.
The structure of the auction will mirror the process of the German auction held last May, which raised £3.9 billion compared with £30 billion in 2000. German carriers have already introduced LTE operations into the country, with Vodafone the first operator in the country to offer 7Mbps, 21Mbps and 50Mbps download speeds, with well over 100 LTE base stations now set up in the country.
O2 UK chief executive Ronan Dunne called for “real competition” across all areas, a more cooperative approach between all parties involved and a simpler process to reduce the risk of legal challenges from any of the bidding networks. He argued any further delay to the implementation of 4G services will see the UK telecoms industry fall even further down the innovation ladder.
Dunne said: “We’ve had effective competition in the UK for around 20 years but the 4G option is not the opportunity to rewrite the books and actually set aside this two decades of competition, which has created fantastic opportunities for consumers in the UK. This auction is about the future and 4G.
“There needs to be real competition for 4G across the marketplace – rural, urban and suburban areas. There are real challenges ahead to achieve that and we have to deal with that in a way that is right for the economy, consumer and our industry. That means we have to challenge ourselves on the models we’re going to use.
“There are four operators chasing three amounts of spectrum, so what are we going to do? We need to come up with innovative solutions. We have to look at the balance of opportunities for citizens, the impact on the environment and effective competition. Strong competition should be good for all the interested parties involved.
“The UK needs a simple process to ensure we don’t fall behind. Germany is already deploying LTE services so we’re already behind and we can’t afford further delay. By a simple process I also mean reducing the risk of legal challenges from the various parties involved, which ultimately slow down the process. All these steps should ensure we have the speedy conditions to succeed here.”