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The UK 4G market is finally on the move, after regulator Ofcom granted permission to the country's largest cellco, Everything Everywhere, to build out LTE this year in its 1.8GHz spectrum. This is on condition it sells some of those frequencies to the smallest player, 3UK, which has given Samsung its first LTE infrastructure contract in Europe.

The other two cellcos, Telefonica O2 and Vodafone, protested loudly at a decision which they said gives EE a headstart and gives them no opportunity to acquire the surplus spectrum in the 1.8GHz GSM band, which is being refarmed in many countries for 4G and delivers an optimal balance between high frequency capacity and low frequency coverage. O2 and Vodafone have GSM spectrum in 900MHz, which is, so far at least, a less mainstream band for LTE.

This situation could see O2 parent, Telefonica of Spain, investing about €1.5bn in spectrum licences in the forthcoming auction of 800MHz and 2.6GHz licences in the UK, which should take place in early 2013. According to Spanish newspaper Cinco Dias, citing unnamed sources, the UK represents 11% of Telefonica's revenue so mobile growth is vital. The Spanish group has also made the UK the center of its new digital business units.

EE welcomed the Ofcom green light, which will enable it to go live with LTE this year. "4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK," the operator said in a statement, though it did not detail any roll-out plans at this stage.

Ofcom restated its previous position on 1.8GHz refarming, saying: "Ofcom has concluded that varying EE's 1800MHz licences now will deliver significant benefits to consumers, and that there is no material risk that those benefits will be outweighed by a distortion of competition. Delaying doing so would therefore be to the detriment of consumers," it said.

"The decision takes account of the forthcoming release of additional spectrum in the 800MHz and 2.6GHz bands, in an auction process set to begin later this year, which will enable other operators to launch competing 4G services from next year."

As part of the terms of its formation - from the merger of the T-Mobile and Orange UK units - EE has to offload some of its holdings in 1.8GHz, where it is the only operator. It will sell 2x15MHz of the spectrum to 3UK, which will also have the right to deploy LTE any time from September 11, like EE, but will actually wait until early 2013.

"3's customers will start benefitting from this investment in our core network early next year and those benefits will grow further as we deploy new spectrum," said CEO Dave Dyson. He told IDG News: "Acquiring this spectrum will more than double the capacity available to customers on our network. We have seen a huge growth in data consumption with average mobile handset customer usage now more than 1.1Gbytes per month." However, analysts pointed out that 2x20MHz was the optimal amount of spectrum for mobile broadband.

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COMMENTS

Posted by 186k on Tuesday 28th August, 2012

3 might have the regulatory right to rollout LTE on the 1800 spectrum but they'll not get their hands on it until it is cleared by EE. EE doesn't have to do that until September next year. Maybe 3 have agreed an earlier date but not sure that's been announced yet

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