Everything Everywhere bags 4G monopoly in UK - for now
Competition? What competition?
Everything Everywhere, the UK's largest mobile operator, will get a monopoly on 4G services in the UK, starting on 11 September and lasting at least until next year's spectrum mega-auction.
EE, which owns the Orange and T-Mobile networks, has been lobbying hard for the decision, over which Ofcom has been faffing for nine months. EE requested the liberalisation back in November last year, and in March Ofcom said it was minded to approve, an announcement which triggered a chorus of disgust from the other operators – which won't be able to deploy 4G until the tail end of 2013 at least. That led to further consultations, and ultimately to today's decision.
Everything Everywhere is understandably cock-a-hoop at the decision. It has been lobbying MPs (and journalists) very hard to support its cause, running a faux grassroots campaign claiming that early deployment of 4G is good for the UK, and that any commercial advantage to EE is simply an unavoidable consequence.
EE is able to deploy 4G as it owns almost half the mobile spectrum in the UK, having swallowed allocations belonging to Orange and T-Mobile, giving it plenty of space to deploy 4G while the rest of the pack are waiting for more spectrum to come up for auction. EE has so much spectrum it was required to sell off a chunk, which looks likely to go to Three, but that's taking a little longer than expected and this ruling will provide no incentive to sell quickly.
"We are frankly shocked that Ofcom has reached this decision," says Vodafone, to the sound of grinding teeth. "The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy."
Three is equally unimpressed: "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."
Three is referring to the fact that Vodafone and O2 are already being allowed to deploy 3G services in the 900MHz spectrum they were given back when the first digital networks were launched. Three is the only operator to have paid market rates for all its radio spectrum, and is understandably miffed that everyone else is using their freebies so broadly.
This decision does mean that the UK will have a 4G network during 2012, at the cost of giving the largest operator a monopoly which could last a year. The temptation for EE, having got its monopoly, will now be to hang onto it by filibustering the auction, something which must not be allowed to happen if any semblance of competition is to be maintained. ®