1/6/2011 2:05:00 PM
Hutchison threatens to pull UK investment
Three’s parent company, Hutchison Whampoa, is threatening to pull future investment in Three UK if the Government does not ensure fair competition in its upcoming spectrum auction.
Hutchison’s concern centres around the sub 1GHz spectrum. Hutchison argues that failing to reallocate 2G spectrum for 3G services between operators will create an uncompetitive environment that will disadvantage Three.
Three has been lobbying the Government and communications minister Ed Vaizey. It wants Ofcom to address the issue in the upcoming spectrum auction. It warns that failure to do so will create higher prices for UK consumers and could stall mobile broadband network expansion.
The operator says it was the level of competition between operators that has resulted in the 3G rollout extending well beyond the license requirement of 80% to 97% coverage. It warns that the potential for further expansion is now threatened by uneven spectrum allocation.
This week Hutchison Whampoa backed Three’s campaign by raising the stakes. In a statement, it raised the prospect of the network pulling out of the UK telecoms market.
The statement said: ‘Hutchison Whampoa is committed to its UK businesses and plans further investment in the country provided that its businesses, particularly telecoms, are allowed to compete fairly.’
Kevin Russell, Three’s CEO, added his voice to the discussion. He said: ‘There is a clear expectation from Three UK that the Government and Ofcom will resolve the competitive distortion created by allowing the re-farm of spectrum currently used for 2G mobile services, and that this will be addressed in the structure of the spectrum auction planned for 2012.’
A source close to the operator said: ‘If the spectrum reallocation fails to ensure fair competition then Hutchison would have to consider whether it was worth investing any more in the network, in what will be an uncompetitive market.’