Election delays UK spectrum plans once again

Auction must wait for new management

By Wireless Watch, 11th April 2010

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Once expected to be in the vanguard of 4G services, the UK's plans to open up new spectrum have been dogged by repeated delays. Legal challenges, cellco mergers and the decision to bundle 2.6GHz and digital dividend auctions together - all these have pushed the UK from the front of the EU's spectrum race to the rear, and now the general election is creating further delay.

The failure to push through new spectrum legislation before the May 6 election has put the UK behind neighbors like Germany, which overcame legal obstacles to its own huge spectrum auction recently. A range of mobile proposals have been put on hold by the UK vote, all part of its high profile but controversial Digital Britain bill. As lawmakers ran out of time to debate the complex package of measures, only a subset of the proposals was passed before Parliament was dissolved in readiness for May 6. Among the clauses that now have to wait for later in the year - and a possible change of government and policy - were the spectrum liberalization plans.

A spokesperson for the UK's Department of Business, Innovation and Skills admitted "there will be no debate [on spectrum] before the general election". This could, once again, reduce the likelihood of 2.6GHz and 800MHz auctions being held this year or even before mid-2011, and of other moves such as the finalization of rules for refarming 900MHz GSM bands. The longer the delay, the more danger of 'capacity crunch' cellcos face, says The Guardian newspaper.

The delay may please some operators though. Vodafone, in particular, could gain from the uncertain position in which the newly merged T-Mobile/Orange finds itself. Although the combined company is now the UK's largest mobile operator, there is now no mechanism in place to manage the sale of some of its spectrum, as required by the terms of the transaction. Nor does it know how much new spectrum it might be able to acquire in future, or whether it will get any frequencies in 900MHz from Vodafone or O2, currently the only holders in that band.

Vodafone claims it is not suffering from capacity crunch and went as far as to say its network would never have suffered the same problems as O2's or AT&T's from iPhone traffic. The operator's head of network development, Mairead Cullen, boasted of the robustness of the cellco's European networks, after years of experience with data-intensive phones, notably the BlackBerry. This expertise means Vodafone, the most aggressive supporter of RIM phones in Europe, understands the impact of smartphones and how to build a stable network, Cullen argued in an interview, as reported by Techradar. "If we'd had the exclusive deal for the iPhone in the UK, there wouldn't have been any data problems," she said.

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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