Three’s CEO Dave Dyson has launched a major attack on the current state of the UK mobile market.
Dyson has urged regulators to do more to ‘level the playing field’ so the business can compete with the likes of EE and Vodafone. He also accused his rivals of ‘strategic bidding’, ‘sitting on spectrum’, and using the threat of legal action to maintain their market position.
Speaking to the media – significantly for the first time since the deal for Three’s owners CK Hutchison to buy rival O2 was rejected – Dyson was brutal in his market assessment.
‘You look at the history and it strongly suggests – even though we’re a bigger business now – that we’ve obviously got something that significantly impedes us. It’s not about the strength of the shareholders; they are making strong commercial decisions. It’s fundamentally about the structure. We’re not looking for a leg-up from Ofcom, we just want a level playing field. And right now there isn’t a level playing field.’
Raising the stakes ahead of the next radio wave spectrum auction, the Three boss said that he believed Ofcom held back from making decisions that may be detrimental to the market’s biggest players because of the threat of legal action.
‘There is very little evidence of Ofcom sticking its neck out and actually supporting the consumer. That’s not because it is incompetent or because it has been asleep at the wheel. It’s because the standard of appeal that Ofcom has to live by is relatively low compared with other regulators in the UK such as the energy industry.
‘Ofcom has always been aware that the big incumbents have massive legal teams and resources to delay and frustrate decisions that Ofcom would look to make.’
Dyson said it was Three’s belief that, in the past, rivals EE and Vodafone had both strategically acquired spectrum that they didn’t actually need.
‘Fundamentally, we think BT/EE and Vodafone have tried to get spectrum that they didn’t necessarily need. And the main object of that was to deny other operators in that market access to the spectrum.’
The next auction, which was initially scheduled for December 2015, is for the 2.3GHz/3.4GHz bandwidths. It was delayed after O2 and Three’s owners threatened legal action against the regulator because the decision on the merger between the two firms was still to be resolved.
Three is asking Ofcom to put certain limitations on the auction to ensure an even greater disparity of spectrum – a suggestion rejected by EE CEO Marc Allera when speaking to Mobile over the summer. Hesaid that he opposed any alteration to the process: ‘I hope that it’s a competitive process, I believe auctions should be.’
Responding to Dyson’s comments, a spokesperson from Vodafone UK said: ‘These are some pretty surprising comments from an operator that has been in the UK market for more than 15 years and has had ample opportunity, as well as the financial resources, to bid for spectrum when it has become available.’
A spokesperson from EE denied that the network was ‘sitting on spectrum’: ‘We have never stopped using our spectrum to deliver the very best network experience for customers. We pioneered 4G and we are a leader in network speeds.
‘We are unique in our commitment to expand 4G coverage to 95% of the UK’s landmass by 2020 – further than any other UK network has done – and will continue to ensure the UK stays at mobile technology’s leading edge.’
Responding to Dyson's comments in regards to Ofcom's ability to stand up for the consumer an Ofcom spokesperson said: 'We always support consumers in our work. In the last few months we’ve launched plans to improve switching for mobile customers, and to require operators to provide automatic compensation when their service falls short. Releasing more airwaves for mobile and home broadband is just one example of how we’ll be supporting consumers in future.'
The regulator's spokesperson also addressed the issue of spectrum stating: 'We plan to publish a consultation in the autumn, which will set out our plans for the 2.3 - 3.4 GHz spectrum award.'