Three and TalkTalk urge Ofcom to cap mobile spectrum ownership at 30%

Smaller mobile operators want a cap before the next spectrum auction in 2017

BT

Three, TalkTalk and the Federation of Communication Services (FCS) have called on Ofcom to cap the amount of spectrum owned by mobile operators like BT and Vodafone.

BT, which bought EE last year, and Vodafone own the most UK wireless radiofrequencies, over which mobile signals are transferred, and other mobile companies fear the market will see less choice and an increase in prices if the firms are allowed to increase their shares.

In an open letter to Ofcom CEO Sharon White, seen by IT Pro, several mobile operators teamed up in asking for a 30% cap on the total amount of spectrum companies can own, in order to level the playing field.

Calling spectrum "the lifeblood of the industry", the CEOs of TalkTalk, Three, City Fibre, Relish, and the Federation of Communication Services wrote:"The UK suffers from the largest imbalance in spectrum distribution across mobile operators of any developed country. BT already owns nearly half of the UK's vital airwaves and Vodafone nearly a third."

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According to Citi (via the Financial Times), BT owns about 42% of mobile spectrum, and Vodafone 28%, followed by O2 with 14% and 15% owned by Three.

The organisations who penned the letter believe such an imbalance in spectrum distribution will result in "higher prices for a poorer service at a time when mobile's importance to the digital economy has never been greater".

Three, TalkTalk and their co-signatories believe a cap would allow smaller mobile companies to own more wireless radio frequencies, resulting in a greater choice of mobile operators with fast and reliable network coverage for consumers.

Their open letter also claims that BT and Vodafone "sit on large amounts of unused mobile spectrum" and that "this denies consumers of other networks access to increased speeds and better costumer experience".

The co-signatories hope Ofcom will consider a cap before the next auction, which is likely to take place at some point in 2017, concerning the 2.3 - 3.4 GHz spectrum.

A BT/EE spokesperson told IT Pro: "We use our spectrum to deliver the very best network experience for customers. We pioneered 4G and we are a leader in network speeds, developing technologies to provide some of the highest mobile download speeds in the world."

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EE also said it is committed to provide 4G coverage to over 95% of the UK's landmass by 2020.

Three CEO David Dyson had already disclosed his concern earlier this year, when he told the FT that BT's financial strength could lead them to acquire an even greater amount of spectrum at the next auctions. This would make life harder for Three, limiting its position in the market.

Ofcom has not yet replied to the open letter, but an Ofcom spokesperson told IT Pro: "We plan to publish a consultation in the autumn, which will set out our plans for the 2.3 - 3.4 GHz spectrum award".

Vodafone did not respond to IT Pro's request for comment.

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