Three calls for cap on mobile spectrum sales

Billy Bambrough
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Men look through the window of a Hutchis
Three is owned by Chinese conglomerate Hutchison Whampoa (Source: Getty)

Mobile carrier Three has called on the telecoms regulator Ofcom to limit how much of wireless spectrum companies can buy.

Three – still reeling from its planned merger with O2 being blocked by the European competition watchdog earlier this year – slammed Ofcom for allowing industry heavyweights Vodafone and the recently combined BT and EE to buy up more spectrum than they use.

Three chief executive David Dyson told reporters that “strategic bidding” by the companies meant there was less access to capacity for the likes of Three and O2, damaging competition and customer service in the industry.

BT and EE currently control 42 per cent of all the UK’s spectrum, while Vodafone has 29 per cent, Three has 15 per cent, and O2 has 14 per cent.

Read more: Was the European Commission right to block the Three-O2 merger?

Dyson claims that BT, EE and Vodafone combined do not use as much as 15 per cent of the total available spectrum.

Ofcom is planning to auction off another tranche of mobile spectrum in coming months, although a date has yet to be decided.

Ofcom will open a consultation in the autumn – expected to last eight to 10 weeks – before deciding how best to run the auction.

The planned £10.25bn merger between Three and O2 was blocked by European regulators in May, due to competition concerns. O2 is now in the process of being floated by owner Telefonica. Dyson said Three would now target organic growth.

Read more: The block of the O2-Three merger proves we need the EU

Three has again run afoul of the EU regulator in recent weeks with plans to introduce a network-wide adblocker which could infringe on net neutrality laws.

It is being left to Ofcom to make a decision on the case and Three is expected to speak with the regulator in coming weeks.

Tim Scott, technology director of business group London First, said:

Ofcom should use the spectrum allocation to promote competition between networks and help fix poor mobile signals both in cities and rural areas.

Mobile networks are faster and more stable with more spectrum, but allocating all the spectrum to a single winner could hurt consumers by making one network clearly superior to its competitors and encouraging price rises.

Last year, mobile networks increased prices by 2.3 per cent, the first increase since 2003. If we want to avoid further, inflation-busting price rises, we need Ofcom to allocate spectrum fairly.