The upcoming 4G and 5G spectrum auction is posed to be a huge boon for consumers over the coming years, with signal improving in major towns and cities, alongside rural locations. However, not all is well when it comes to the networks bidding to buy the spectrum.
In particular, Three have registered their severe dissatisfaction with how the telecoms regulator Ofcom are planning to operate the upcoming auction. After a long war of words, Three have declared that they’re willing to go to court against Ofcom, should the regulator fail to address what Three consider to be anticompetitive sets of rules guiding the auction.
Three have hand delivered a letter to Ofcom, notifying them that they intend to seek a judicial review, a significant ramping up of tensions over their previous actions.
Three’s issue with Ofcom stem from the current situation with spectrum ownership. Specifically, the combined forces of BT and EE control around 42 percent of mobile spectrum in the UK. Vodafone owns 29 percent, while Three and O2 lag behind with 15 and 14 percent, respectively.
Three wants Ofcom to impose strict spectrum caps in the upcoming auction to prevent companies like EE and Vodafone from stockpiling the airwaves. Three contend that if they can’t increase their spectrum share, they can’t improve their service and will therefore lose competitiveness, weakening the market. That’s obviously something that Ofcom would be keen to avoid.
Indeed, EU regulators and Ofcom blocked the merger of O2 and Three because it would negatively affect competition levels in the UK. The companies, once merged, would have boasted a combined spectrum holding at least on par with Vodafone.
Nevertheless, Ofcom are taking steps to even out the playing field in the auction. Last November they announced that they would block BT/EE from bidding on any spectrum in the 2.3GHz band, which is the usable 4G spectrum. Three launched a campaign at the time, urging customers to lobby Ofcom for stricter rules.
Ofcom then announced that it would introduce a cap on “all the mobile spectrum expected to be useable in 2020.” That’s set at 37 percent for all carriers, and means that BT/EE and Vodafone will be limited in how much spectrum they can acquire in the 3.4GHz band, which is earmarked for future 5G services.
So, what does this mean for customers of the likes of EE? Well, it means that whilst their service will improve somewhat, EE will be held back from improving their network quite as much as they would have hoped. That’ll be a source of indirect frustration for those using the contact details for EE to speak to their customer service team, but it won’t be immediately noticeable.
Ofcom have not yet commented on the stance Three have taken, but the regulator is understood to be considering their options before making word official.