Three UK CEO calls for Ofcom to level spectrum playing field to address BT dominance

Three UK CEO David Dyson warned that BT could use its financial clout to outbid rival mobile operators in future spectrum auctions in the country, and called on regulator Ofcom to ensure a level playing field.

Speaking for the first time following the European Commission's decision to block a proposed £10.3 billion (€13 billion/$14.8 billion) merger of Three UK and O2 UK, Dyson told the Financial Times that BT could seek to hold back its mobile rivals by bidding "strategically" in future spectrum auctions, and noted that the former incumbent already holds close to half of the spectrum already allocated to operators following its acquisition of EE in January.

The newspaper cited Citi figures that show BT currently holds around 42 per cent of the UK's total mobile spectrum, followed by Vodafone on 28 per cent. Three UK holds 15 per cent and O2 UK 14 per cent, the FT reported.

A Three UK merger with O2 UK had the potential to improve the pair's position in terms of spectrum, which Dyson argued would have enabled the combined company to better compete with BT and Vodafone.

In the absence of that combination, Dyson called for Ofcom to limit the participation of BT and Vodafone in future spectrum auctions, including requiring BT to give up some of its current share before being allowed to acquire more spectrum, the FT reported.

The Three UK CEO explained that spectrum is an essential component in ensuring mobile operators remain competitive and pointed out that Ofcom's own objection to the merger with O2 UK was based on concerns over the impact on consumers that could result from a reduction in the number of full MNOs from four to three.

In the meantime, Three UK will move forward by focusing on its position as a mobile-only player, expanding its network to boost mobile coverage, and converting its 3G spectrum to 4G, Dyson told the FT.

For more:
- read this Financial Times report (subscription required)

Related articles:
Orange executive says European MNO consolidation on ice for at least two years
Report: Telefónica favours keeping O2 UK after failed Hutchison sale
Reports: Sky could play key role in future O2 UK, Wind Italy deals
Three is no longer a magic number in EU telecoms
EC blocks proposed O2/Three UK merger; CK Hutchison considers legal challenge

Read more on