Ofcom gives Everything Everywhere green light to launch UK 4G

For nine months the UK telecoms industry held its breath as it awaited Ofcom’s decision on whether to allow Everything Everywhere to launch 4G services using its existing holding of spectrum.

Then on August 21, 2012 Ofcom granted that liberalisation. The decision has been seen as firmly pro-consumer, but it has angered rival operators. While it is not a perfect outcome, it does mean that the UK moves a step closer to finally getting 4G, which could arrive as soon as September this year.

Ofcom’s assessment is that we are better off having some form of 4G in the UK today than having none

From September 11 2012, Everything Everywhere (EE) will be the first UK operator able to market and sell 4G services to its customers. Vodafone, O2, and (for the time being) Three will have to wait until the end of 2013 and the conclusion of the joint award of the 800MHz and 2.6GHz bands.

When Ofcom first hinted that it was minded to allow EE to deploy 4G early, the other operators understandably voiced their frustration.

Ultimately, however, Ofcom has decided that allowing a temporary head start for one operator is a better option for consumers than not having any 4G at all. This has certainly taken the industry by surprise.

Perhaps understandably, the reaction of EE’s competitors has not been friendly.

In addition to complaining that the decision is unjust, at least one operator has raised the concern that EE (and now possibly also Three, given that it has acquired EE’s divested spectrum) is incentivised to delay the joint award of the auction planned for later this year, and to further extend its period of advantage.

This is something we have warned against before, and comments from Culture Secretary Jeremy Hunt suggest that the issue is finally on the government’s radar.

However, with Ofcom having made considerable concessions in EE’s favor, it is less plausible that the operator would carry out such action. A legal challenge to the auction rules from O2 or Vodafone also seems a lot less likely now that the auction is the only way for them to launch 4G services of their own.

Three could be a rival to Everything Everywhere’s 4G service, having acquired its divested spectrum

To go some way to alleviate fears of a competitive advantage, Ofcom could have required EE to clear the 2×15MHz of 1800MHz spectrum it has divested to Three at the point of sale, and around the same time as permitting it to launch 4G, rather than maintaining the September 2013 deadline set by the European Commission when it approved the merger.

This would have guaranteed that there would have been at least two players offering 4G services, since the liberalisation decision applies to the entire 1800MHz band.

The advantage that EE will get from the head start will ultimately depend on the availability of devices and the readiness of its network.

If – and this is a big if – Apple launches the new iPhone with LTE1800MHz capability, it would be a massive boost for EE. Such an outcome would only intensify the reaction of the other players, and would increase the possibility of litigation.

Introducing 4G can help the UK have “the best superfast broadband in Europe by 2015”

The early arrival of 4G is likely to be especially welcomed by residents of rural and remote Britain, many of whom lack even the most basic broadband services.

For what is widely defined as the final third of the UK that will not be passed with fiber broadband, mobile remains the most likely solution.

Unfortunately the UK government has so far failed to pay enough attention to how 4G could help. The government wants the UK to have “the best superfast broadband in Europe by 2015” (a vague commitment that will probably be assessed against a combination of speed and availability), and if this is to be achieved, then mobile is going to play a crucial role.

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