A legal threat from the owners of Three and O2 has forced Ofcom to delay the latest UK spectrum auction.
An auction of radio wave bands formerly used by the Ministry of Defence applications for the auction were due to start this month (December 2015). However, with the anticipated changes in the market and the possibility of legal action has meant the regulator has pushed it back until takeover decisions have been finalised.
The regulator said that the O2’s owners Telefonica and Three’s owners Hutchison Whampoa had threatened to take Ofcom to court should the auction take place before the European Commission’s decision on the O2 takeover had been concluded.
Three O2 timeline wait
The regulator’s estimation of the time frames of both deals also made interesting reading. Ofcom expects the BT/EE merger to be concluded in January 2016 with the O2/Three deal to be decided by mid-May.
If this turns out to be the case it would represent a significant gap between the two deals, something that O2 CEO Ronan Dunne said that he wasn’t expecting when he spoke to Mobile in November. Although the O2 boss did say that delays could extend the wait for approval.
Euro watchdog wait
In statement on the delay Ofcom said that it would wait until the European Commission had come to a conclusion on the O2/Three deal, it said: ‘After careful consideration, given these specific circumstances, we have decided for reasons of good public administration to delay commencing the auction process. Therefore, Ofcom will not now commence the auction process until the European Commission has taken its decision as to whether the proposed merger between Telefónica UK Limited and Hutchison 3G UK Limited is compatible with the common market.’