Vodafone, O2 UK and 3 UK to speed up LTE launches following 'peace talks'

UK operators agreed to avoid litigation over LTE deployments after regulator Ofcom brokered a "peace talks" between the carriers and intervened to accelerate the release of LTE spectrum by six months.

EE will launch LTE service in the UK on Oct. 30.

The new agreement will see EE, formerly known as Everything Everywhere, launch LTE before the end of this year. Vodafone, Telefónica's O2 UK and 3 UK will now be able to purchase spectrum at auction in early 2013 and launch LTE service in the first half of next year, six months earlier than expected, according to Reuters.

The involvement of Ofcom to defuse the growing level of disagreement between the UK operators was likely spurred by the government's desire to keep the UK from falling any further behind other countries with access to LTE services. Many analysts had thought the other UK operators might take legal action after Ofcom decided to allow EE to refarm its existing 1800 MHz spectrum to launch LTE services early. The other operators viewed the decision as one that gave EE a huge time-to-market advantage.

"Essentially the idea was to avoid any legal action that would delay the auction, principally by reducing the gap between EE being able to roll out a LTE service and the others being able to roll it out with the spectrum they get in the auction," an unnamed government source told Reuters.

However, Matthew Howett, leader of Ovum's telecoms regulatory practice, said that all parties have been to blame at some point during this long and drawn out process.

"Initially it was Ofcom for failing to appreciate how operators might actually intend to use the spectrum and its inability to take a joined-up approach, only to be followed by the government for taking its eye off the ball during the change of parliament once a way forward had been laid out," he said. "Finally, the operators themselves can't escape blame entirely either. For too long it suited them all too well to keep sending the matter back to Ofcom at a time when money was tight and the economic outlook uncertain."

Howett also highlighted that any advantage EE might have with their early LTE launch will depend on how well the other operators respond.

"Much has been made of the iPhone 5 'LTE exclusivity' that EE will have, however the other players have also been busy upgrading their 3G technologies, which for a time will almost rival EE's 4G speed capability," he said. "The problem lies with them being able to market this speed boost as true LTE--it isn't and will only come once they have acquired the new and additional spectrum that is now finally on the horizon."

However, Mark Newman, chief research officer at Informa Telecoms & Media, said he believes that this operator agreement provides an important window of opportunity for EE to capture significant market share from high-end mobile users.

"The situation is similar, in many ways, to the periods of exclusivity granted to operators when the iPhone first launched. O2 managed to cement itself as the leading UK operator during this period and associate itself with an aspirational product like the iPhone," he said. "EE is going to launch a major national advertising campaign in the coming weeks and the combination of an attractive new brand, faster speeds and the iPhone 5 (which will operate on the LTE network) is going to be a pretty compelling proposition. O2 and Vodafone are going to have to think really hard about how to freshen up their brands."

While welcoming the deal, O2 UK Ronan Dunne said it had been "deeply frustrating" that it had taken this long to work out that the LTE spectrum could be freed up earlier.

He added that UK operators now have a mountain of work to do to educate consumers about the benefits of LTE. "A huge proportion of our customers think they have got 4G already because they have a phone that says iPhone 4," he told the Daily Telegraph.

For more:
- see this Ofcom statement
- see this Reuters article
- see this Daily Telegraph article
- see this Financial Times article (sub. req.)

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