Vodafone fears UK LTE auction delay following Ofcom decision on spectrum

Vodafone is fearful that the forthcoming UK LTE auction will be delayed following UK regulator Ofcom's decision to allow Everything Everywhere (EE) to repurpose its 1800 MHz spectrum to launch LTE services.

"The worry is that both EE and more importantly 3 UK now have an incentive to litigate and delay the LTE auction--EE because it will extend the length of its competitive advantage and 3 UK because with 1800 MHz 'in the bank' it can try again to get reserved 800 MHz spectrum by litigating to change the auction rules," a Vodafone spokesman told Computing.

EE agreed, following Ofcom's announcement, to transfer some of its 1800 MHz spectrum to 3 UK for an undisclosed sum, which could enable it to roll out LTE services next year.

The Vodafone spokesman added: "All Ofcom needed to do to avoid this problem was to say that EE could not launch LTE services until the auction was at least under way. EE would still have had an advantage as the spectrum being sold is not cleared of TV [broadcast] signals until the late summer but the auction would have been secure and all operators would have had a clear path to 4G."

Commenting on Ofocm's move, Espirito analysts said in a note reported by Proactive Investors: "We are not surprised by Vodafone's reaction but think it unlikely that Ofcom will backtrack on its decision. Ofcom gave EE permission to launch ahead of the auction because it believed that the benefits to the consumer outweighed the impact on competition."

"In our view the best Vodafone can hope for is a delay in Everything Everywhere launching service," the analysts wrote.

EE's quick action to sell off part of its 1800 MHz spectrum, a move forced upon it by the European Commission's competitive assessment of the merger of Orange and T-Mobile in March 2010, could now upset bidding in the UK LTE auction.

3 UK, the UK's smallest operator, is now thought to be more interested in bidding in the 800 MHz and 2.1GHz spectrum auction to supplement the 1800 MHz it has acquired from EE, potentially disrupting plans being hatched by Vodafone and Telefónica's O2.

3 UK CEO Dave Dyson said: "Acquiring this spectrum will more than double the capacity available to customers on our network. We have seen a huge growth in data consumption with average mobile handset customer usage now more than 1.1GB per month."

"New spectrum, supported by further committed technology spend, is a clear signal that we are committed to maintain our lead as the network built for the mobile internet," he said in a statement.

For more:
- see this Computing article
- see this Proactive Investors article
- see this Marketing Magazine article

Related Articles:
Everything Everywhere given LTE go-ahead; Vodafone cries foul
Report: Vodafone and Telefónica face scrutiny over network-sharing deal
Ofcom sets UK LTE auction for late 2012, but operators could challenge rules
Mallinson: Spectrum licensing remains the key to LTE deployment
UK broadcasters: £180M not enough to combat LTE interference
Everything Everywhere could unleash bidding war with LTE spectrum sale

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