Further delays to 4G auction ‘almost inevitable’

It is ‘almost inevitable’ that the much-delayed 4G auction will be sent back to the drawing board and held up by more litigation from mobile operators who object to Ofcom’s plans for the joint award of 800Mhz and 2.6Ghz spectrum, an analyst has predicted.

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The only way that Ofcom would change the minimum reserve plans for Three, according to Howett, is if Three decided to buy some 1800Mhz spectrum from Everything Everywhere. 

It was stipulated when Orange and T-Mobile merged to become Everything Everywhere that it would have to divest some of its 1800Mhz spectrum, which can be used for 4G services, in order to maintain effective competition in the market.

“If Three buy some spectrum from Everything Everywhere then we are looking at a different playing field. Ofcom has admitted that if Three did this then it would lose their protection in the award,” said Howett.

“But whether Everything Everywhere would sell to Three, who knows, and whether Three wants 1800Mhz, I wouldn’t like to say,” he added.

Everything Everywhere is also pushing Ofcom to let it roll out 4G networks this year using its remaining 1800Mhz spectrum, which received initial support by the regulator, but faced heavy criticism from the other mobile players.

Howett suggested that Everything Everywhere’s campaign should also serve as a wake-up call to the government who may need to step in and ensure the auction takes place sooner rather than later.

“Ofcom is already convinced that this should happen as soon as possible and they are doing everything they can to make that happen. However, unless there are some material changes to the current proposals (such as the removal of minimum spectrum portfolios), litigation seems almost inevitable,” said Howett.

“I think the main player that needs to be convinced or lobbied is the government, and they need to be in a position to move if there is litigation. The industry wants to make it happen, they don’t want to send it back to the drawing board."

He added: “I think that Ofcom is fully gearing itself up for further delays, but they have got to make sure that whatever final decision they come to that if it is litigated that they are confident that they will win. If they don’t then this literally does go back to square one and it could be many years before we get to auction.”

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