UK regulator Ofcom’s re-farming of 2G spectrum for 3G services has created “significant competitive distortions”, the CEO of local mobile operator Three has said.
According to Kevin Russell, by failing to re-auction, re-allocate or make clear how similar…
UK regulator Ofcom’s re-farming of 2G spectrum for 3G services has created “significant competitive distortions”, the CEO of local mobile operator Three has said.
According to Kevin Russell, by failing to re-auction, re-allocate or make clear how similar frequencies will be made available in the future, Ofcom and the UK government have jeapordised “the whole competitive environment that the 3G auction in 2000 started to establish”.
In a statement circulated to media outlets, Russell warned: “The competitive benefits of spectrum consolidation and concentration were a key driver in last year’s merger of [mobile operators] Orange and T-Mobile.
“If the government and Ofcom get this wrong further consolidation could result. Ultimately that can only be bad, not good, for UK consumers.”
Russell’s comments follow a reported threat from Three-owner Hutchison Whampoa (HWL), the Hong-Kong conglomerate, which allegedly told Ofcom it could scrap its UK operations if next year’s 800MHz auction goes ahead without frequency caps.
A spokesman for Three confirmed it was concerned that an uneven playing field could present an unfair advantage to larger rivals Vodafone and O2, but dismissed speculation that it would quit the UK.
“You don’t just withdraw”, he told TelecomFinance, adding that the group has made it clear that further investment in telecoms depends on the way the industry is regulated and managed going forward.
Allowing companies to use the spectrum they rent for old 2G services for 3G, without paying the “billions” companies like Three paid in the first round of 3G spectrum in 2000, provides a “big leg-up to the incumbents”, he said.
