Three Wants Ofcom To Reserve Spectrum For Fourth Operator

Three wants Ofcom to reserve spectrum for a fourth mobile operator at the next major auction of airwaves following the failed £10.25 billion merger between the CK Hutchison-owned mobile operator and O2.

Speaking to the FT, Three CEO Dave Dyson warned that larger operators such as BT-owned EE and Vodafone could outbid his company, further damaging its ability to compete.

He reportedly suggested the two biggest operators should be restricted or forced to give up other spectrum before they can bid for a share of the 190MHz worth of 2.3GHz and 3.4GHz bandwidth that will be up for grabs.

Three spectrum auction

“The combination of BT and EE is incredibly strong financially. It has got the financial ability to outcompete everyone in the market in how much they are willing to pay,” he is quoted as saying.

“Potentially, given how much spectrum they are already sitting on, BT is incentivised to strategically bid in the next auction to restrict the other operators in the market from increasing their spectrum portfolio.”

In the last major auction in 2013, spectrum was reserved for a fourth operator in order to maintain sufficient levels of competition.

Given the European Commission (EC) blocked the proposed merger with O2 on the basis that a reduction from four operators to three was likely to impact competition in the retail and wholesale mobile markets, Ofcom should ensure the UK’s smallest network has the chance to expand and compete – something it won’t be able to do without enough spectrum.

CK Hutchison has previously hinted that the O2 takeover was necessary if it was to continue investing in the UK. O2 would have given the combined operator significantly more spectrum and more than 20 million new customers.

However Dyson told the newspaper Hutchison would continue to invest so long as Three’s business model was working.

It had been suggested TalkTalk could be a target for CK Hutchison, allowing the company to offer mobile, landline, television and broadband services in bundles, but Dyson indicated Three would  position itself as the UK’s best mobile-only operator and ruled out entering the ‘quad-play’ market for the time-being.

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