Controversial Decision Will Give U.K. First 4G LTE Service This Year

Verizon Wireless co-owner Vodafone criticized a decision by the U.K. Office of Communications to allow a U.K. mobile carrier co-owned by T-Mobile parent Deutsche Telekom (DT) to operate what will be that country’s first 4G LTE service. Ofcom approved an application by Everything Everywhere (EE), co-owned by DT and France Telecom, to use its 1800 MHz spectrum in the U.K. to operate the service. Ofcom-issued licenses will allow EE to start the service as soon as Sept. 11, the regulator said in a written statement.

Ofcom’s decision drew the ire of other top U.K. carriers, who must wait to launch their own 4G LTE services following the anticipated sale of spectrum on the 800 MHz and 2.6 GHz bands. Ofcom expects to open up the application process for the auction later this year, with bidding set to start early in 2013 (CD July 25 p16). EE praised the Ofcom decision, which it said would be good for the U.K. “Consumers will soon be able to benefit from the much greater mobile speeds that 4G will deliver,” EE said in a written statement. “4G will drive investment, employment and innovation” (http://xrl.us/bnmo3d).

Vodafone was “frankly shocked,” the carrier said. “The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market,” the company said in a written statement. Vodafone said the timing of Ofcom’s approval was “bizarre” because EE was said to be in talks to sell some of its spectrum to rival carrier Three.

In its decision, Ofcom said it did not believe the early launch of EE'S 4G LTE service would be detrimental to competition, despite EE rivals’ concerns. “Although we consider it likely that EE will enjoy a competitive advantage during the period before other operators are able to launch their own LTE services, we consider on the evidence available that any such advantage is unlikely to result in an enduring advantage which distorts competition to the detriment of consumers,” Ofcom said. “Our assessment takes account of the impending release of additional spectrum in the 800 MHz and 2.6 GHz bands which will enable other operators to launch competing LTE services during the course of 2013” (http://xrl.us/bnmo4a).