The industry reacts to Ofcom’s decision on 4G

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Everything Everywhere’s rivals have expressed shock at the ruling that will see the operator launch 4G services in the UK this year, but Ofcom insists it will benefit consumers

Ofcom has given Everything Everywhere (EE) the green light to launch 4G this year, granting the firm a licence starting on September 11 to launch an LTE service on the 1,800MHz spectrum it already owns.

The decision comes five months after the regulator originally said it was “minded” to give the go-ahead to EE.

That statement provoked an angry response from EE rivals O2, Vodafone and Three, who argued the move would give EE an unfair head start in the race to launch 4G.

EE argued launching 4G early would benefit consumers and the economy.

O2, Three and Vodafone countered, saying that by allowing EE to launch a service early, Ofcom was threatening the long-term competiveness of the UK mobile market.

The operators delivered their official submissions on the proposals to Ofcom in May, and three months later the regulator has announced it plans to stick with its original decision, allowing EE to launch an LTE service as much as a year before its competitors.

Announcing the decision on August 21, the regulator concluded: “Varying EE’s 1,800MHz licences now will deliver significant benefits to consumers, and there is no material risk that those benefits will be outweighed by a distortion of competition.

“Delaying doing so would therefore be to the detriment of consumers.”

This is how the industry reacted.

Vodafone:

“We are frankly shocked that Ofcom has reached this decision. The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.

“Ofcom’s timing is particularly bizarre given the reports that Everything Everywhere is currently in discussions to sell some of its spectrum to Three, which Ofcom has previously been at such pains to protect with its over-engineering of the 4G auction. This means the balance in the auction will fundamentally change.

“The regulator has spent several years refusing to carry out a fair and open auction. Now its decision today has granted the two most vociferous complainants during that entire process a massive incentive to further delay it.

“We wholeheartedly support the Secretary of State’s call for the 4G auction to occur in December and look to the regulator to finally do its job and produce a competitive market for 4G services as soon as possible.

“We firmly believe a fully competitive market for 4G services is in the best interests of Britain. We have already committed ourselves to reach 98 per cent of the UK population with indoor 4G services by 2015 – two years before Ofcom’s own target – but we need to acquire spectrum in the auction to achieve this. Ironically, all that stands in our way right now is the regulator.”

O2:

“We are hugely disappointed with today’s announcement, which will mean the majority of customers will be excluded from the first wave of digital services. This decision undermines the competitive environment for 4G in the UK.”

Three:

“Liberalisation of 2G spectrum to date has distorted the competitive landscape in the UK, which ultimately harms consumers. Further liberalisation without addressing competition issues could make that distortion worse.”

Everything Everywhere:

“Ofcom’s decision to make 4G available this year is great news for the UK. Consumers will soon be able to benefit from the much greater mobile speeds that 4G will deliver. 4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK.”

Carphone Warehouse chief commercial officer Graham Stapleton:

““It’s shaping up to be an exciting autumn for smartphone users. There’s not only a wave of excitement for the new generation of handsets and operating systems, but customers can now look forward to experiencing 4G for the first time.

“They’re going to see ultra-fast internet speeds, improving the experience of browsing the web on the go, particularly streaming or downloading video content.

“It’s going to be perfectly timed for Christmas, when most customers plan to buy their new handset.”

Phones 4U chief marketing officer Scott Hooton:

“We’re really excited about today’s LTE announcement. Customers in the UK are definitely ready and waiting for 4G services; just this month three quarters of our customers said they’re aware of 4G and the benefits it will give them (improved internet and faster download speeds).

“Until now we’d hit a glass ceiling with smartphone performance, where quad-core processors had brought us as far as we could go in terms of speed and power. 4G is going to allow us to take performance to a whole new level, giving us the power of a PC in our pockets with an infrastructure which will allow us to really put it through its paces.

“Now the onus is on the industry to meet consumer expectations at launch. It’s going to be a gradual migration to 4G rather than an overnight transformation so expectations need to be set, but it will deliver everything our surveyed customers want and we expect there to be huge demand.”

CCS Insight product manager Kester Mann:

“The announcement was undoubtedly a brave move by Ofcom in the face of an expected strong backlash from mobile operators. However, Ofcom believes that the benefits of allowing the launch outweigh the potential risk of distorting competition. The UK has lagged its European counterparts on this for too long, which has led to questions about its technological leadership in recent months. With over 80 LTE networks already commercially live, according to the GSA, the announcement is a great boost for the UK and makes up for lost ground in LTE deployment.

“We expect rival operators to vehemently oppose the move on the basis it gives EE an unfair head start. While legal challenges against the decision would only act to delay the process at this stage, it is important those players who have lost out have a commercial Plan B.”

mPowa CEO Dan Wagner:

“The introduction of 4G in the UK is long overdue because for far too long the internet speeds we have had – both on mobile and to fixed locations – have been inferior to other parts of Europe and further afield.

“This will really enhance competitiveness in this ‘always on, always connected’ business landscape and will help companies offer much more comprehensive mobile services that are quicker and more flexible.

“We are entering a new paradigm in business whereby we can now take advantage of these developments in technology and offer a service that reflects customers’ needs.

“Today’s consumers want faster, more convenient ways of interacting with businesses and paying for products. Faster, more robust connectivity will take this forward massively.”

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