Simmer Down O2 And Vodafone – Ofcom Just Uncorked A 4G Genie

The much-delayed 4G auction in the UK has been a sorry saga. British business has been impeded and British consumers have been cheated of better services, thanks to self-serving threats of litigation that have forestalled the arrival of faster data services.

Now, Ofcom has announced it is allowing Everything Everywhere to offer 4G on existing spectrum in the 1800MHz region, which was originally offered for 2G services, so it looks like faster data will soon be available for some.

And, like clockwork, the arguments go right on. O2 and Vodafone have howled with disapproval, as their rival gets to offer 4G services quickly – even though their continued complaints have delayed the Ofcom auction process and suggest they are not in any great hurry to offer services.

These operators really don’t care about the country. They just want to make sure no other operator will get ahead of them. And if they can prevent someone else from getting a lead by sabotaging the whole process, then that’s what they will try to do.

Jeremy Hunt, the culture secretary, pointed out in a speech yesterday, that this hurts the country far more. “We have been beset by threats of litigations from mobile operators,” said Hunt, according to Computer Weekly’s report of his speech. “You might be able to derive a temporary individual competitive advantage by taking out legal action, but you will be disadvantaging not just the whole industry but also your whole company much, much more by preventing the UK from rolling out those 4G networks.”

Stop the suffering!

While the operators have been tussling, the country has suffered. We would have every sympathy with Ofcom if it threw up its hands and simply gave one operator the go-ahead, simply to get the ball rolling. But actually, Ofcom has done something better than that.

Firstly, the advantage it has given Everything Everywhere is a small one at best. It costs money to clear other services off the spectrum and implement 4G, and EE will still have to put in that investment to deliver what can only develop slowly into a proper 4G service.

Secondly, even if the auction goes to the wall, there is a second 4G service opportunity, as Three is likely to buy some of EE’s spectrum. Admittedly, this will take a while, but it does put a definite end to any fears surrounding an EE 4G monopoly, independent of what happens in the auction.

O2 and Vodafone were the ones who were moaning about the auction in the first place, as they own the best 2G spectrum and have the most to lose if things change. They’ve been constantly whining about Ofcom’s determination to give Three the spectrum it needs to be a real competitor, and would probably have gone on dragging their feet and quibbling all the way to the auction room.

Now though, they will have to get behind the auction process and make sure it happens as planned. With EE gradually ramping up services, I predict the other operators will experience a sudden conversion and get behind the auction, which might finally go through at the end of this year, producing moderate returns for the government.

Think about it. Late this year, the UK might have a spectrum auction in which operators will pay realistic prices for the spectrum, and then get on with swift implementations of services.

It would be a first in the history of UK spectrum. But it might just happen.

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