3UK CEO warns of dangers from LTE auction rules

The quarrel surrounding the forthcoming auction of the UK's LTE spectrum is heating up, with the CEO of 3UK complaining to a government committee that his company could be forced to exit the UK mobile market.

Russell

Outgoing 3UK CEO Kevin Russell, the head of 3UK said forthcoming auction could destabilise the fragile state of competition between operators in the UK. "This decision on spectrum fundamentally sets up the competitive structure for the UK mobile market for the next 10 years," Russell told a committee in Parliament, according The Independent.

An added factor to this threat, Russell said, is what might happen following the completion of the merger between Orange UK and T-Mobile UK to become Everything Everywhere (EE). "The danger is that five operators goes to four, then goes to three in a very short period of time." Without access to the spectrum "we cannot grow as quickly as we need to," warned Russell.

The creation of EE, Russell said, has not yet had an impact on the UK market, but the merger will mean "there will be a degree of competitive tension that comes out of the marketplace."

The consequences of how the UK LTE auction is structured, which is scheduled for next year and is already mired with complaints and potential legal challenges, also promoted the deputy CEO of EE, Richard Moat, to get involved. He criticised the fact that O2 and Vodafone will have a "significant advantage" over their rivals due to their ability to refarm their 900MHz 2G spectrum to carry 3G services without being charged any extra by the telecoms regulator, Ofcom. Both 3UK and EE believe this is unfair.

Ofcom indicated in March it wants to see at least four national operators providing LTE services within the UK market, and would impose maximum and minimum amounts of spectrum that Vodafone and other operators can bid for.

For more:
- see this Independent article
- see this Telecom Paper article (sub. req.)

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