UK telecom company Three has asked Ofcom to limit the amount of spectrum that BT and EE can buy in the next spectrum bid which is about to go down later this year.
And Ofcom might have to provide it. This is because currently Three UK occupies the least amount of spectrum in the country.
Ofcom will be auctioning portions of UK airwaves, 2.3GHz and 3.4GHz bands, to be precise. And it looks like Three has got its eye on them. After all, these are the ideal bands for 4G, mobile broadband and wireless broadband, which is something Three already provides. EE and Vodafone currently use 2.6 GHz bands to provide some of their 4G services.
The bands up for auction were previously used by Military of Defence for internal communication, but now, they have been repurposed.
Mobile operators need spectrum bands to operate. These bands are the ones that deliver signals to users. In order to keep business fair, Ofcom regulates these spectrum bands and auctions them off, as and when new bits of spectrum become available.
Previously, Three’s plan to merge with O2 was snapped by EU, since it felt a Three-O2 merger would be too much of a monopoly. But without the merger, Three is struggling to compete with the big companies.
Leading the charts in spectrum is EE, which has the biggest portion of the UK spectrum. And it turns out, it is almost double of what Three has. Second position on the chart is occupied by BT.
Talking about this issue, the CEO of Three, David Dyson said “The combination of BT and EE is incredibly strong financially. It has the ability to outcompete everyone in the market in how much they are willing to pay. Potentially, given how much spectrum they are already sitting on, BT is incentivised to strategically bid in the next auction to restrict the other operators in the market from increasing their spectrum portfolio. That could make life difficult.”
Dyson was also disappointed with European Commission when Three-O2 merger was blocked by them. Expressing his concerns, he had said, “You have to move forward and make the most of the cards you’re dealt even if you disagree with the decision. We have a challenger DNA in the business. At the right valuation, Hutchison will invest but as the smallest [operator] we have few customers to recoup the investment.”
