Capping spectrum auction bad for market: Alexander

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Everything Everywhere chief says Ofcom’s proposal to cap the amount of 1800Mhz and 2.6GHz spectrum operators can bid for could damage industry growth

Everything Everywhere chief executive Tom Alexander (pictured) says Ofcom’s proposal to include a ‘spectrum cap’ on operators during the auction of 1800MHz and 2.6GHz spectrum could hamper the mobile industry’s growth.

Under the plans for the auction (released today), Ofcom recommended that “caps” be used during the auction to avoid any one operator purchasing a “disproportionate’ amount of spectrum.

Two of these safeguard caps are proposed:The first is a sub 1GHz safeguard cap of 2×27.5 MHz, which will mean that no one competitor can obtain more than this amount of sub 1 GHz spectrum.

The second is an “overall spectrum holdings cap” of 2×105 MHz, which will mean that no one competitor can obtain more than this amount of spectrum overall.

But Alexander hinted Everything Everywhere would challenge this part of the proposal during the consultation process which opened today and end on May 31.

He said: We hope that through consultation Ofcom may look to address a number of issues, including the overall spectrum cap, which is currently set at a level which ignores the different characteristics of low and high frequency spectrum and differing numbers of customers, meaning that it may constrain the normal development of the market.”

Alexander also said that he was “concerned” the proposals for the allocation of sub 1GHz spectrum do not reduce the dominance of the incumbent holders of that spectrum enough.

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