In an effort to urge Ofcom to limit the amount of spectrum any one mobile operator can own, Three and TalkTalk have sent an open letter to the watchdog.
Three had previously hinted that it would take action to prevent mobile operators, namely BT, from gaining an unfair advantage over its competitors. Now the firm has decided to join together with TalkTalk, CityFibre, Relish and the Federation of Communication Services to convince Ofcom to implement a cap as to how much of the spectrum individual mobile operators can gain in the upcoming auction in 2017.
The mobile operators expressed their concerns in an open letter to Ofcom CEO Sharon White, saying: “The UK suffers from the largest imbalance in spectrum distribution across mobile operators of any developed country. BT already owns nearly half of the UK's vital airwaves and Vodafone nearly a third. This imbalance has developed as a consequence of Ofcom's failure to put protections in place that ensure all networks have access to sufficient amounts of spectrum to deliver a great mobile service and competitive prices.”
Next year the auctions will take place with the 190MHZ spectrum, which was previously owned by the Ministry of Defence, being made available to mobile operators. In the 2013 auctions, over £2 billion was earned by carriers trying to gain more spectrum for their networks.
The open letter also made the argument that a 30 per cent cap would allow all providers to have adequate resources to provide their customers with strong coverage and capacity. The companies went on to detail the benefit of such a cap, saying: “A cap at this level will allow a competitive bidding process among existing operators and new entrants and provide a fair return to the public purse. By protecting effecting competition and supporting a market with genuine choice, a 30 per cent cap would also deliver significant long-term economic benefits for the UK well beyond the short-term sales proceeds of the auction.”
A cap would also halt BT and Vodafone from hoarding the available spectrum as they are currently doing. The companies further argued that this is hurting the UK's digital economy, saying: “BT and Vodafone already sit on large amounts of unused mobile spectrum, currently supported by mobile handsets. This denies customers of other networks access to increased speeds and better customer experience.”
“The failure to implement the cap will mean that BT and Vodafone have the opportunity to stockpile even more airwaves and increase their dominance with competition and consumers suffering as a result.”
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