Everything Everywhere has been given permission to refarm its 1800MHz spectrum for 4G, with the operator pledging to launch a next generation mobile service this year.
Ofcom said the refarming would deliver 'significant benefits to consumers' and claimed there is 'no material risk' that the benefits would be outweighed by a distortion in competition.
Everything Everywhere welcomed the move as 'extremely positive news for British consumers, businesses and the economy'. However, rival operators O2, Vodafone and Three attacked the regulator's decision, with Vodafone accusing Ofcom of having a 'careless disregard' for consumer interests.
Ofcom said Everything Everywhere would ultimately decide when to launch a 4G service, but added it had issued varied licences allowing it to do so from 11 September. A spokesperson for the operator said it intends to launch a 4G service this year, but no further details were available. CEO Olaf Swantee said previously that the operator planned to launch a a 'small scale' service ahead of next year's 4G auction.
An Everything Everywhere spokesperson said: 'Ofcom's decision to make 4G available this year is great news for the UK. Consumers will soon be able to benefit from the much greater mobile speeds that 4G will deliver. 4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK.'
A Vodafone spokesman said: 'We are frankly shocked that Ofcom has reached this decision. The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.'
A Three spokesman said: 'Liberalisation of 2G spectrum to date has distorted the competitive landscape in the UK, which ultimately harms consumers. Further liberalisation without addressing competition issues could make that distortion worse.'
An O2 spokesman said: 'We are hugely disappointed with today’s announcement, which will mean the majority of consumers will be excluded from the first wave of digital services. This decision undermines the competitive environment for 4G in the UK.'
Thomas Wehmeier, principal analyst at Informa Telecoms and Media, said Ofcom's decision was a 'major milestone' for the UK mobile market. It said EE had a 'golden opportunity' to establish an early lead in the UK's 4G market although it needed a sucessful launch strategy and a portfolio of 4G devices. He said the new iPhone, expected to be announced next month, would 'almost certainly' support 4G LTE but it was less certain if it would run on 1800MHz. He said: 'It is a huge “if”, but if the new iPhone were to support EE’s band it would undoubtedly be the much-needed spark to ignite Britain’s heavily-delayed 4G market.'
Kester Mann, at CCS Insight, said the 4G decision was a 'great opportunity' for Everything Everywhere to differentiate itself from its rivals. He added he expected the operator to initially offer 4G dongles, with 4G compatible smartphones to follow in 2013.
He added: 'We expect rival operators to vehemently oppose the move on the basis that it gives Everything Everywhere an unfair head-start. While legal challenges against the decision would only act to delay the process at this stage, it is important that those players who have lost out have a commercial Plan B to react to Everything Everywhere’s move.'
Morgan Mullooly, research analyst at Analysys Mason, said Ofcom's decision was 'startling, if not completely unexpected' and would give EE at least a three month headstart over its rivals.
Meanwhile, Three is understood to be close to buying the Everything Everywhere spectrum that it was required to divest following the merger of France Telecom and Deutsche Telekom. Neither company would comment on the speculation.
Editor: Graeme Neill