Vodafone rails against UK regulator’s 4G spectrum decision

Rating: This ain’t no level playing field, Ofcom

For a body which is supposedly mandated to create competition in the UK communications space (Of com), to make the decision it has today [August 21st 2012] is mind blowing. It has decided to give the go-ahead to Everything Everywhere to launch 4G/LTE services over existing 1800 MHz spectrum from September 11th 2012. In its decision the body said, “[This] will deliver significant benefits to consumers, and there is no material risk that those benefits will be outweighed by a distortion of competition. Delaying doing so would therefore be to the detriment of consumers.” Wow. How can allowing one of the four UK mobile operators to gain a head start over its rivals possibly be fair? Naturally, Vodafone has exploded and GoMobile News can see exactly why.Let’s get one thing straight right now. We’ve got nothing against Everything Everywhere.

The company has spotted a commercial opportunity and has gone for it.

We’d also utterly agree that introducing 4G services from September 2012 is in consumers’ interests because the UK is lagging behind other markets – especially the USA.

But – and it’s a big but, how can Ofcom sanction such a massive distortion of the market?

How can it free up spectrum intended for 2G for 4G before even announcing that the 4G spectrum auction will actually take place in December 2012 as widely speculated?

Take a look at this particular complaint forwarded to us by a Vodafone UK spokesperson … “Ofcom’s timing is particularly bizarre given the reports that Everything Everywhere is currently in discussions to sell some of its spectrum to 3, which Ofcom has previously been at such pains to protect with its over-engineering of the 4G auction.”

“This means the balance in the auction will fundamentally change.” If Vodafone is right and 3 gets some spectrum from Everything Everywhere, then the balance in the UK market will be shifted.

We reckon that a classic 4G auction would have a serious detrimental effect on 3′s position. However, if 3 acquires new spectrum then it means tearing up the rule book for the whole UK 4G auction.

This is Vodafone’s view … “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.”

The UK’s cellular industry badly needs 4G services to be introduced as quickly as possible. How can handing the entire sector to a single mobile operator possibly help?

As Vodafone says, “We firmly believe that a fully competitive market for 4G services is in the best interests of Britain.”

“We have already committed ourselves to reach 98 per cent of the UK population with indoor 4G services by 2015 – two years before Ofcom’s own target – but we need to acquire spectrum in the auction to achieve this.”

“Ironically, all that stands in our way right now is the regulator.”

So here’s GoMobile News‘ considered verdict on the current state of the UK’s 4G market. It’s a complete mess.

What we’d love to know is how quickly can Samsung produce a Galaxy and Apple produce an iPhone which can support LTE over 1800 MHz?

The interval between EE having 4G handsets and its three rivals offering 4G handsets working over 800 MHz and 2.6 GHz might not be the yawning gap it looks like right now.

To read the full Ofcom announcement go here. To see GoMobile News‘ previous views on the EE situation go here.