Uk Regulator to Reclaim Radio Spectrum - Allow 3g at 900mhz
In the UK, Ofcom has now decided that the spectrum should be available to all operators.
"Our proposals are designed to make more spectrum available for high-speed mobile broadband services across the whole of the U.K., and to ensure that the U.K. mobile market continues to be one of the most competitive and innovative in the world," said Ofcom Chief Executive Ed Richards.
Ofcom plans to award the licenses in 2009, with operators able to start using the spectrum for new services in 2010.
T-Mobile, Orange and 3 will be able to bid for the new licenses, while new mobile phone operators may also be able to enter the U.K. market.
Vodafone and 02 won't be able to rebid for the part of the spectrum that they give up. However, the two operators are likely to profit from Ofcom's move as they will retain the majority of the old 2G spectrum they own and will be able to use it to more cheaply rollout mobile broadband services.
Both Vodafone and O2 told Dow Jones Newswires that they welcome Ofcom's consultation and will be reviewing the proposals.
"We welcome Ofcom's move to liberalize and open up the spectrum. We've been calling for refarming for quite a while," said a spokesman for Vodafone.
Martin Mabbutt, an analyst at Japanese investment bank Nomura, said it was highly unlikely that the auction would result in operators bidding massive prices, similar to the combined GBP22.5 billion that the U.K.'s five 3G operators paid in 2000.
"In theory this might see other competitors emerge, the reality is that the market is already highly penetrated and a new competitor would find it very expensive to establish any sort of material presence in the market. As a result we think this is good news for Vodafone and O2," said Mabbutt. The regulator expects the "refarming" of the radio spectrum to benefit the U.K. to the tune of GBP6 billion, both by generating cash from an auction and also by spurring usage of new mobile broadband services. The money raised from the auction process will go to the U.K. Treasury.
-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com
(END) Dow Jones Newswires
Page 1 | 2
Posted to the site on 20th September 2007
