The UK telecoms regulator, Ofcom, should include rules in its LTE spectrum planned for next year that favour less dominant operators, according to the CEO of 3UK, the country's smallest service provider.
According to 3UK's chief, Kevin Russell, there is the strong risk that its much larger rivals could acquire all or most of the 800 MHz and 2.6 GHz spectrum assigned for LTE, leaving 3UK with its existing 3G bands. Russel said that if this were to happen, the company would encounter difficulties in competing with Orange/T-Mobile (combined as Everything Everywhere), O2 and Vodafone, and it could lead to further consolidation.
"There is a risk of a strategic premium being bid to squeeze 3 out of the marketplace," Russell told the Financial Times. "If 3 is blocked out of spectrum in the auction process, there will be consolidation in the marketplace."
To stop this from happening, Russell has proposed that Ofcom should impose a cap on how much spectrum an operator can hold below the 1 GHz band. This would impact O2 and Vodafone, which together hold the majority of the 900 MHz band. The proposed cap is supported by Everything Everywhere and opposed by O2 and Vodafone.
Russell also pointed towards how other European regulators, such as in Germany, imposed spectrum caps during auctions, while others, including Spain, are considering similar rules for future spectrum sales. However, O2's UK CEO, Ronan Dunne, was dismissive of the idea and told the Financial Times that there is "no reason for a sub-1GHz cap that would preclude any operator from accessing the 800MHz band".
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