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T-Mobile UK has pulled out of its legal challenge to the country's 2.6GHz spectrum auction plans, leaving O2 to fight alone. The UK regulator Ofcom has issued its latest update on the many-twisted saga of the auction, already delayed several times from an original target of 2007.

T-Mobile and O2 have been arguing since last May that it was unreasonable to sell 2.6GHz licenses until the cellcos knew whether the 900MHz GSM band would be cleared for 3G services, and under what terms; and whether Ofcom would follow through on plans to make Vodafone and O2 reallocate some of their 900MHz spectrum to the other two 2G carriers, whose GSM services run in higher bands. Until these decisions were clear, the carriers would not know how much 3G capacity they already held in 900MHz, and therefore would have problems valuing 2.6GHz effectively.

With T-Mobile backing off, O2 is the only barrier to an auction, though as The Register points out, the Telefonica-owned cellco is less demanding than T-Mobile was, only asking that the 2.6 GHz band should be sold off in two instalments. The hearing is scheduled for May 19 and if a settlement is reached, the auction could proceed in the fall. However, Ofcom's statement says that "O2 is also arguing that T-Mobile's claim should continue notwithstanding T-Mobile's decision to withdraw".

It went on: "A High Court judgment in Ofcom's favor would open the way for us to invite applications in the summer and to begin the auction in September."

Ofcom also raised the thorny issue of potential interference to some aeronautical radars in the adjacent 2.7GHz band. It admitted there is some risk of this, and there will probably be the need for "some transitional coordination arrangements during a period in which the radars are modified to address this vulnerability". In the short term, trial licenses will be kept away from locations with such radars in place.

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