O2 and EE trade blows over 4G spectrum


O2 joins Vodafone in criticising decision to allow Everything Everywhere to launch 4G early, as EE argues for sub-1GHz spectrum access for all

O2 has joined Vodafone in criticising Ofcom’s decision to allow Everything Everywhere to refarm spectrum it already owns to launch a 4G service this year, saying it could delay the 4G spectrum auction scheduled for the end of this year.

In in a statement issued as the regulator’s second consultation period on the forthcoming 4G auction closed, O2 said: “We are concerned that Ofcom’s proposal to allow one operator to launch 4G early on its existing spectrum is contradictory to its objective of delivering a competitive market environment with four competing players.

“This could expose the process to further risk of delay.”

However, the operator has given cautious support to the Ofcom’s plans to ensure a third operator, expected to be Three, remains a viable player in the UK market following the auction.

A spokesperson said: “From the very start of this process, Ofcom has said that the UK must retain a competitive market environment and that it will remove the ability for operators to behave strategically over spectrum allocation.

“To this end, Ofcom’s auction proposals had much to commend them, and we were minded to support a small spectrum reservation for Hutchison or a new entrant, if Ofcom could make a stronger case for four players.”

Meanwhile, Everything Everywhere has released a statement urging Ofcom to intervene to ensure the 4G auction sees all operators able to gain access to sub-1GHz spectrum.

O2 and Vodafone hold 900MHz spectrum, but the auction will see 800MHz spectrum also up for grabs.

Ofcom had previously said that sub-1GHz spectrum was necessary to remain a viable player in 4G.

However in its most recent consultation document the regulator dropped a commitment to ensure all players were able to buy some of the spectrum, saying it no longer considered it necessary.

An EE spokesperson said: “While we understand the challenges faced by Ofcom in creating the auction rules, they need to grasp the opportunity to fix the long-term ownership imbalance of the higher quality low-frequency spectrum that has distorted competition in the industry for the past two decades.

“In addition, the auction proposals are too complicated and create a risk of producing outcomes that do not serve consumer interests.

“We would like to see the auction rules address the uneven distribution of the high quality low-frequency spectrum and simplified to ensure they can be effectively implemented.”