Everything Everywhere given LTE go-ahead; Vodafone cries foul

Orange and T-Mobile subscribers in the UK could have access to LTE services as soon as next month following Ofcom's decision to allow Everything Everywhere (EE) to launch LTE on its existing 1800 MHz spectrum.

This move has surprised EE's rivals, with Vodafone calling the UK regulator's timing bizarre. The regulator didn't "properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market," the operator said in a statement, according to Bloomberg.

In making the announcement, Ofcom said: "EE's 1800 MHz licences would deliver significant benefits to consumers, and ... there is no material risk that those benefits will be outweighed by a distortion of competition," according to Reuters.

The UK regulator said EE could start offering LTE services starting in early September, although the launch date was up to the company.

Analysts at Espirito Santo Investment Bank told Reuters that it was good news for EE, giving it a temporary commercial advantage as it may be able to market LTE branded services ahead of the other UK mobile operators.

Commenting on Ofcom's decision, Analysys Mason research analyst Morgan Mullooly said that this move could indicate Ofcom's growing impatience in agreeing a set of rules that satisfies all UK mobile operators, and was prepared to accept EE's earlier proposal to use its 1800 MHz spectrum for LTE.

Thomas Wehmeier, principal analyst at Informa Telecoms & Media, also credits EE with its decision to invest heavily in readying the ground for LTE without having the regulatory clarity that would have mitigated any such risks.

"Ever since Olaf Swantee took the helm at EE, the company has been focused on establishing itself as the UK's leading high-speed mobile broadband network," said Wehmeier in a statement. "This has not only seen EE spend large sums in modernising their 2G and 3G networks, but also invest quietly to fully prepare their nationwide network for the arrival of LTE. This meant swapping out old radio equipment and laying the backhaul infrastructure needed to carry large flows of data up and down the country."

Of note, the Informa analyst claims that EE now has a golden opportunity to establish an early lead in the UK's LTE market, but it will only be able to exploit this window if it is able to build a successful launch strategy.

"The most successful 4G operators globally, including in the world's most advanced 4G markets of the US and Korea, have been those that came out of the traps quickly and built their LTE networks out extensively," said Wehmeier.

However, Analysys Mason's Mullooly warns that EE's rivals might launch a legal challenge against the decision. "Vodafone in particular has adopted a very rueful, if not adversarial tone, by stating: 'All that stands in our way right now is the regulator.'"

Given that the UK LTE auction is due to start in December of this year, any legal action could delay the process and hand EE an even greater advantage.

Separately, EE said it would launch a new brand by the end of the year in addition to Orange and T-Mobile. The new brand would not share the Everything Everywhere name of the parent group, a spokesman told Reuters. He would not confirm if the brand would be solely dedicated to 4G services.

For more:
- see this Bloomberg article
- see this Reuters article
- see this Financial Times article (sub.  req)

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