O2 and Vodafone Could Face Spectrum Exclusion From Ofcom

Mobile network operators O2 and Vodafone could be excluded from the auction process for buying additional spectrum when UK switches off its analogue network.

Both mobile companies could therefore keep their spectrum but won't be able to bid for the new 800Mhz which will be made available after the move to digital TV and radio takes place. Vice versa, they will have to sell existing spectrum to be able to acquire more for mobile broadband and other services.

The news was announced by Independent spectrum broker Kip Meek who was in charge of coming up with a proposal to solve the current deadlock.

Ofcom is looking to use the 900Mhz spectrum as part of plans to get mobile broadband coverage for rural areas but this would entail taking away spectrum from O2 and Vodafone.

Both companies are obviously against this scenario. Hence Meek's proposal looks more like a carrot-and-stick solution, especially given the fact that T-Mobile, 3 and Orange would be allowed to get their hands on the 800Mhz spectrum band.

Stephen Carter said that "The Independent Spectrum Broker has concluded that there is a need to find a new comprehensive approach to enable the roll-out of Next Generation Mobile Services, which offer enormous benefits for the UK economy".

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Our Comments

O2 and Vodafone do not really have the choice as the current government has made of universal broadband service one of its priorities. It looks though that O2 could possibly relinquish some of its allocated spectrum as its UK CEO, Ronan Dunne, has already said that Meek's report is a "significant step forward in making Digital Britain a reality and is good news for UK PLC".

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