Telcos challenge Ofcom to introduce spectrum cap

By:
James Pearce
Published on:

CEOs of Three, TalkTalk, CityFibre, Relish and the FCS pen letter to Ofcom chief Sharon White calling on her to introduce 30% limit on UK spectrum

UK regulator Ofcom is facing calls to introduce a 30% cap ahead of a UK spectrum auction due to take place in 2017.

Ofcom is expected to open a consultation on the auction, which will see the release of 190MHz of spectrum, next month.

A letter penned by the CEOs of Three UK, TalkTalk, CityFibre, Relish, and the Federation of Communications Services, claims the UK “suffers from the largest imbalance in spectrum distribution across mobile operators of any developed country” with BT holding “nearly half” of all spectrum, and Vodafone around 29%.

It is addressed to Ofcom CEO Sharon White, and challenges her to cap a company’s spectrum holding at 30%, which would prevent BT and potentially Vodafone bidding next year, but allow Three, O2 and other entrants to take part in the auction.

“You can fix this. The next auction of spectrum could be your last opportunity to give UK mobile customers a highly competitive mobile market which gives them the speeds, coverage and performance they deserve and demand,” the group of chief executives said in the letter.

“A 30% cap is not a radical intervention as it has no downside or negative consequences. A cap at this level will allow a competitive bidding process among existing operators and new entrants and provide a fair return to the public purse.

“By protecting effective competition and supporting a market with genuine choice, a 30% cap would also deliver significant long-term economic benefits for the UK well beyond the short-term sales proceeds of the auction.”

The letter comes just weeks after Three UK chief Dave Dyson launched a scathing attack on Ofcom over its handling of BT, challenging the regulator to spin infrastructure arm Openreach off into its own company.

Earlier in the year, Ofcom said it opposed Three-parent company CK Hutchison’s proposed £10.25 billion takeover of O2. The deal was later blocked by the European Commission.

Despite this, the regulator backed a Competition and Markets Authority decision to wave through BT’s £12.5 billion acquisition of EE in January without any remedies.

A spokesperson for Ofcom said: “We plan to publish a consultation in the autumn, which will set out our plans for the 2.3 - 3.4 GHz spectrum award."