Three could benefit from the forthcoming 4G auctions after Ofcom proposed some of the available spectrum be reserved for a fourth national wholesaler aside from Everything Everywhere, Telefónica and Vodafone.
It also rolled back from proposals to reserve an amount of sub-1GHz spectrum for Everything Everywhere for it to be a 'credible' national wholesaler in future.
However, the regulator said today there 'is significantly less risk' that the operator might not continue to be a credible wholesaler post-auction. It said it took into account the 'large' amount of 1800MHz spectrum that Everything Everywhere holds, and claimed this would give it sufficient quality of coverage and capacity and allow it to have sufficient spectrum to provide LTE.
Ofcom launched a consultation on the new proposals this morning (12 January). While it suggested sub-1GHz should be reserved for a fourth national wholesaler, it said this was not a guarantee it would win this spectrum through auction.
It also revised the spectrum cap options. Last year, it proposed a range, split between a share of sub-1GHz, 2.6GHz and 1800MHz. However, it proposed an overall spectrum cap of 2x105MHz and a sub-1GHz spectrum cap of 2x27.5 MHz.
Ofcom also proposes one of the 800MHz licences up for auction contains the obligation to extend mobile coverage to 98% of the population, in light of the recent Government decision to invest £150m in infrastructure to improve mobile coverage. This would be comparable to current 2G coverage. Ofcom also adapted its proposals on licence fees for spectrum. It said that in addition to the amount bidded, it will use information from auctions in other countries and on spectrum value to set prices.
Responses to the consultation should be submitted by 22 March 2012. Ofcom said it will outline its auction plans in the summer but added the auction 'could' start in the fourth quarter.
A Vodafone UK spokesperson said: 'Ofcom has produced a lengthy report outlining its latest proposals for the auction of the spectrum needed to bring the next generation of mobile internet services to consumers and businesses in the UK. We will obviously need to study it before making any comment about its contents.' Other operators were unavailable for comment.
Ovum analyst Matthew Howett said: 'Ofcom has essentially been stuck between a rock and a hard place. It wants to award these frequencies as quickly as possible to the benefit of consumers, but also wants to ensure that they do so in a competitive way. The decisions they take now are likely to affect the level of competition in the sector for at least a decade. Striking a balance was never going to be easy. The set of proposals now on the table appear to leave everyone with something to be optimistic about, but at the same time requires compromises to be made. Perhaps Ofcom has got it right?'