Ofcom has been urged to put a cap on the amount of spectrum any one mobile operator can own ahead of the release of 2017’s spectrum auction.
An open letter sent to Ofcom CEO Sharon White signed by TalkTalk, Three, CityFibre, Relish and the Federation of Communication Services said that the regulator must ensure that any one player, chiefly BT but also Vodafone, does not have undue market advantage.
“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,” the letter stated.
“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.”
The auctions are set to take place next year and will see 190MHz of new spectrum released that was previously owned by the Ministry of Defence, three-quarters of that released in the 2013 auctions that raised over £2bn.
The letter argued that a 30 per cent cap would mean that all providers have adequate resources in the market to provide strong coverage and capacity for customers.
“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,” the companies wrote.
“By protecting effective 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.”
The letter also said that a cap would stop BT and Vodafone hoarding spectrum, something they are already doing, which the operators claimed is to the detriment of the UK’s digital economy.
“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 letter said.
“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.”
The letter follows warnings by Three CEO David Dyson earlier this year that BT is being allowed to carve out too big a share of the mobile market since its purchase of EE.
Three had hoped to fight back against this by buying O2, but the deal was blocked by the European Commission which ruled that it would lead to less choice and higher prices.
This flurry of market activity caused the auction of the spectrum to be pushed back to 2017, as those involved in the various deals argued that it would be unfair to have to make purchasing decisions without knowing their position.
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