Everything Everywhere has said it is 'very disappointed' with Ofcom's proposals about the forthcoming 4G auction, claiming consumers will be damaged by its plans.
However, Three CEO Dave Dyson described the Ofcom proposals for the 4G auction as a 'pragmatic step' towards bolstering a competitive market for mobile data, with Vodafone and O2 also welcoming the plans.
Earlier this morning, the regulator proposed some of the available spectrum be reserved for a fourth national wholesaler, aside from Everything Everywhere, Telefonica and Vodafone. It also rolled back from proposals to reserve some of the sub-1GHz spectrum for Everything Everywhere. Under the new plans, which operators have until the end of March to respond, mobile coverage could be extended to 98% of the population.
In a statement, Everything Everywhere said Ofcom has failed to recognise the importance of the sub-1GHz spectrum. A spokesperson said: 'Everything Everywhere is very disappointed to see that Ofcom has again reversed its proposal to ensure all mobile operators hold a minimum amount of sub 1GHz spectrum. Ofcom is missing a huge opportunity for the UK to address the imbalance in sub 1GHz spectrum holdings, which has damaged consumer interests for the last 20 years – and is a situation which is now threatening to continue.
'The importance of sub 1GHz spectrum, which delivers service and cost benefits, has been recognised by other regulators across Europe and supported by economic analysis. All of the regulators bar Ofcom have made vigorous efforts to support healthy and sustainable competition by ensuring that the imbalance of sub 1GHz holdings is redressed.'
Three's Dave Dyson said: 'Today’s proposals appear to be a pragmatic step towards bolstering the prospects of a competitive market for mobile data which would benefit all UK consumers.
'The decisions made by Ofcom as a result of this consultation will determine how much consumers can look forward to more choice and innovation in the mobile data revolution. We urge Ofcom and the Government to maintain momentum now and to ensure the auction is delivered in 2012 as planned.'
A Vodafone spokesman said: 'We welcome Ofcom’s revised proposals, which bring the UK closer to a fair and open auction that will benefit the wider economy, increase competition and ultimately lead to the creation of innovative and exciting new services for consumers.
It added: 'Ofcom has produced a lengthy document and we need to understand the regulator’s rationale for protecting a fourth operator, but it has made significant steps towards bringing 4G services to this country.'
The operator said it is 'well beyond' the testing phase for 4G. It has run three trials of the technology during the past three years in the UK and it said the team who established its 4G network in Germany is working with its UK technical team.
An O2 spokesman said: 'It is good to see Ofcom’s latest publication, which details modifications in its terms for the forthcoming spectrum auction. This comes as a result of the first consultation process, which we took the opportunity to contribute to.
'As we have said throughout this process, the key objective of the 4G auction should be to ensure that operators are able to exploit the full potential of the spectrum, in order to deliver true connectivity for the benefit of consumers, business and UK Plc. We need to review the extensive content in more detail before making any further comment.'
Analyst PwC said it expects the auction to earn the UK Government between £3bn and £4bn. Brian Potterill, director of its strategy team, said: '"Most interestingly, Ofcom is no longer proposing that any of the most valuable 800 MHz spectrum is necessarily reserved for the 4th bidder. However, spectrum caps imposed on other bidders may still limit the auction prices for this spectrum.
'With uncertainty over the level of bidding, the minimum reserve prices set for the auction could be critical. Ofcom is keeping its counsel on the levels it proposes until closer to the auction. However, regulators in other European markets have become more aggressive in recent auctions and typical reserve prices are rising.'