UK mobile operator Everything Everywhere (EE) has mandated Morgan Stanley to oversee the sale of 1800MHz spectrum it is required to divest this year.
EE, a Deutsche Telekom and France Telecom joint venture, needs to offload a quarter of its 1800MHz…
UK mobile operator Everything Everywhere (EE) has mandated Morgan Stanley to oversee the sale of 1800MHz spectrum it is required to divest this year.
EE, a Deutsche Telekom and France Telecom joint venture, needs to offload a quarter of its 1800MHz spectrum in 2012 to satisfy European Commission conditions that are tied to its approval for the creation of the JV back in 2010. The group was originally required to offload 2X15 MHz of these frequencies, although TelecomFinance understands that it has asked the EC to decrease this amount.
In an emailed statement on 9 April, the operator said it expected to complete its spectrum sale in advance of the UK’s 4G spectrum auction, which is currently scheduled to take place in Q4 2012.
Reports suggest EE’s spectrum sale could raise as much as £400m. However, these proceeds are dependent on how much a buyer would need to spend on license fees, which have yet to be determined by local regulator Ofcom.
Local rivals Vodafone and O2, whose spectrum is predominately in the 900MHz band, are likely to be the frontrunners for the additional spectrum, with Hutchison-owned 3 UK, the country’s smallest operator, also expected to be interested in the extra capacity.
Under EC rules, EE has to sell the frequencies to an operator that can provide credible competition in the UK market. To this end, the buyer would need to be assessed by competition authorities, which could make it difficult for a new entrant to acquire the frequencies if it has no previous spectrum holdings.
Meanwhile, EE is seeking approval to use its existing spectrum for use with 4G technology. Last year, Ofcom allowed all operators to use their 2G frequencies for 3G use, and EE claims its request for further liberalisation is in line with EC guidelines aimed at fully utilising superfast technology.
Launching a four-week consultation on 13 March on whether to allow EE to roll out 4G early, the regulator said: “Ofcom has considered whether allowing Everything Everywhere to use this spectrum in this way would distort competition, and provisionally concluded that it would not.”
However, a decision in EE’s favour is now in doubt following strong resistance from rival operators.
