UK MNOs ‘hamper growth’ by delaying 4G auction

The head of Ofcom Ed Richards has accused mobile networks of “holding back innovation and hampering growth” because their threats of litigation mean that the UK will be the last major European economy to hold a 4G auction.

Control of the spectrum sell-off, which is meant to deliver the high-speed mobile broadband needed to keep up with the explosion in smartphone use, could be handed back to politicians in the next communications act, Ofcom chief executive Richards told an industry gathering in Brussels.

“I think some major companies will have to reflect upon whether they have inadvertently jeopardised the benefits of objective, independent regulation in this area by virtue of their willingness to game the system,” said Richards.

“I am sure legislators would be all too willing to accept an argument which returns power in such matters to politicians, in light of the apparent inability of the current model to make timely decisions where the national interest is at stake.”

Germany’s first 4G service was launched by Vodafone in December 2010. The UK will have to wait until at least January 2013 for its first 4G signal; the spectrum was originally meant to be auctioned in 2009.

Europe is already lagging the USA and Asia in rolling out 4G, which can serve wider areas at higher speeds than the current 3G systems being used. Three American networks are using the technology, and 26 commercial networks were up and running around the world by August this year, according to trade body the GSA, with 93 expected by the end of 2012.

Ofcom is hoping to publish new rules for the auction, which could raise over £3 billion for the Treasury, in December. The sell-off is scheduled for the end of 2012.

The previous rules are being revised after veiled threats of legal action from O2 and Vodafone, which were concerned that rivals Three and Everything Everywhere were to be given preferential treatment. But Three has complained that Vodafone and O2 were given a special dispensation to keep wavelengths that they were allocated back in the 1980s, rather than seeing them auctioned off in the 4G auction.

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