Ofcom has blocked BT and its mobile arm EE from bidding for more spectrum in an auction of airwaves that will allow faster downloads for 4G users.
The ban is an attempt to halt the group’s increasing dominance in the mobile market but, at the same time, the regulator has allowed BT to bid for airwaves critical to rolling out future 5G services, a move that has angered rival operator Three.
The UK communications regulator has launched a consultation into the proposed auction of the spectrum, which will be critical in helping to meet demands for mobile broadband as well as future 5G mobile services.
BT – which last year paid £12bn to buy EE, Britain’s largest mobile phone network – currently holds 45% of the UK’s usable mobile spectrum. This compares with 28% for Vodafone, 15% for O2 and 12% for Three UK.
Ofcom has blocked BT/EE from bidding for any more new spectrum in the 2.3GHz band, which could be used to boost existing 4G capability meaning faster downloads and internet browsing for consumers.
“Ofcom is concerned that, if these immediately usable holdings were to become more unbalanced, this could harm competition in the next few years,” the regulator said. “If BT/EE were to acquire all the 2.3GHz being awarded, it would have almost half of the immediately usable spectrum in the market.”
However, BT/EE will be allowed to bid for the second chunk of spectrum to be auctioned, the 3.4GHz band that is considered critical for the rollout of 5G services across Europe.
Ofcom’s decision to allow BT/EE to bid for 5G spectrum has angered Hutchison-owned Three, which last year had its £10.25bn takeover bid for O2 blocked by competition regulators. Three has called for BT/EE to be completely stopped from bidding for the sale of the spectrum.
“Ofcom exists to promote competition and protect consumers but it has once again shown it is not willing to make the big decisions needed to deliver the best outcome for the UK,” said Dave Dyson, chief executive of Three UK.
“It has allowed BT and Vodafone to stockpile valuable mobile airwaves and put genuine choice for consumers at risk. A 30% cap on total spectrum ownership and a spectrum reservation for smaller operators are the only measures that will preserve competition for the benefit of UK mobile consumers.”
Ofcom defended its move, which will be consulted upon after responses on the proposals close on 30 January 2017. It said the spectrum for 5G was not “immediately useable” and that it is “important that operators are given an opportunity to acquire this spectrum so they are able to consider early development of 5G services”.
“The UK has long benefited from strong mobile competition,” said Philip Marnick, spectrum group director at Ofcom. “We are designing the auction to ensure everyone benefits from a market that continues to innovate and serve them well. “Spectrum is the essential resource that fuels the UK’s economy. This auction can help ensure that UK consumers can access the mobile data services they need, and that operators can continue to innovate and build for the future.”
