UK could fall behind if spectrum cap legal action goes ahead warns analysts

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They say delays in the rollout of 5G would be likely as EE claims its challenge would not slow down progress

The UK could fall behind other countries in the rollout of 5G if potential legal action from EE and Three against a proposed 37 per cent cap on spectrum holdings goes ahead.

That is the view of industry analysts after EE threatened to “challenge the proposed structure” of the upcoming mobile spectrum auction, although CEO Marc
Allera (pictured) claimed “there is no reason that our challenge should slow down progress”.

“We’re proposing to Ofcom that the auction for ‘immediately usable’ 2.3GHz spectrum for 4G go ahead as soon as possible without our involvement,” he added.

“But we cannot allow a competitor to opportunistically seek to further constrain our ability to invest in spectrum. We must protect our customers’ mobile experience, and keep the UK as a world leader in mobile.”

O2 CEO Mark Evans agreed that legal would cause a delay and urged Ofcom to hold an auction for 2.3GHz spectrum while the 3.4GHz spectrum is contested.

Legal challenges

Analysts have suggested legal challenges could cause delays, potentially lowering the UK’s standing in the global network operator stakes.

CCS Insight principle analyst for operators Kester Mann (pictured right) said: “Three said this would hold the spectrum auction back by three months and given that standards haven’t been completed and 5G doesn’t launch until 2020, that sounds ambitious.

“It’s already [been] delayed significantly, and obviously that is not good for the UK and, in particular our ambition to potentially lead in 5G.”

Potential delays

IDC associate VP of mobility research John Delaney referred to the release of 4G spectrum and the delays that occurred due to legal challenges.

“If the legal action goes ahead it will probably delay the availability of the spectrum to UK operators and that is undesirable, but it’s not unprecedented. We had the same thing with 4G spectrum and in fact we were one of the last European countries to launch the services.

“It could delay the introduction of 5G but whether it damages it in the long run is much less likely. It’s a question of whether the UK wants to be first with 5G; I don’t think that is a particularly useful goal to aim for.”

Ofcom spectrum group director Philip Marnick added: “The quickest way to release airwaves needed by mobile users is to award them to operators, through the open auction we’ve set out, without legal challenges of delays.”

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