Everything Everywhere could unleash bidding war with LTE spectrum sale

The decision by Everything Everywhere (EE) to sell part of its spectrum portfolio is likely to prompt bids from UK operators keen for an early entry into the LTE market.


EE  hired the investment bank Morgan Stanley last week to conduct the sale of a quarter of its 1800MHz spectrum,  and is looking to complete the transaction by the fourth quarter of this year. An EE spokeswoman told Dow Jones Newswires that Morgan Stanley had been appointed to "provide independent professional advice," but declined to comment on reports that the sale of its 2G spectrum could attract bids up to £400 million.

The sale of the spectrum is a condition of the merger of Orange UK and T-Mobile UK to create EE.

EE CEO Olaf Swantee told the Financial Times that the sale is designed to encourage competition by finding a company that could create a rival LTE service. "Whoever we sell to has to be approved by the competition authorities," he said.
"The test is someone who can provide genuine competition."

However EE acknowledges that Ofcom will need to approve EE's decision to use 1800 MHz spectrum for LTE instead of 2G services. Ofcom is supportive of this change of use--bringing it in line with European directives--although opposition from rival operators has emerged during the protracted consultation over the planned LTE spectrum auction.

Regardless of this, Swantee said he remains confident that EE will be in a position to launch LTE services before the end of this year, and also acknowledges that the operator will be required to provide access to this network to 3UK under the orders of the competition authorities.

For more:
- see this Financial Times article (reg. req.)
- see this Dow Jones Newswires article (sub. req.)

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