06:08 ET<\/span><\/span><\/p>\nUK regulator Ofcom has given phone operators the green light to trade spectrum in a move intended to increase mobile network capacity.<\/p>\n
Available bandwidth is becoming a huge issue as smartphones put increasing demand on networks.<\/p>\n
The trading of airwaves comes ahead of a crucial spectrum auction next year that will usher in 4G data services.<\/p>\n
Both the auction and the decision to allow operators to trade existing spectrum have caused controversy.<\/p>\n
Spectrum trading allows operators to sell off the airwaves they own in the 900MHz, 1800MHz and 2100MHz frequency bands.<\/p>\n
Historically the 900MHz slice of spectrum has belonged exclusively to O2 and Vodafone because they were the only two mobile operators on the market when it was handed out.<\/p>\n
While other nations have reallocated this spectrum to offer a more level-playing field ahead of 4G auctions, this has not happened in the UK.<\/p>\n
Ofcom had originally planned to redistribute the spectrum allocated to O2 and Vodafone, but was met with a legal action, initiated by the two operators.<\/p>\n
Lifeblood<\/span><\/p>\nOfcom dropped its plans following the merger of T-Mobile and Orange.<\/p>\n
Everything Everywhere (EE), the parent company of T-Mobile and Orange will be the biggest beneficiary of spectrum trading.<\/p>\n
It was required to sell off about 19 percent of its spectrum frequencies as a condition of the merger of the two operators.<\/p>\n
Three unhappy as it has the least spectrum to trade.<\/p>\n
“Spectrum is the lifeblood of smartphones and the mobile internet and for those with surplus holdings it is also a strategic asset, so voluntary trading is the exception,” it said in a statement.<\/p>\n
“This move simply allows those who have been gifted access to public spectrum to profit from it, with no benefit for UK taxpayers,” it added.<\/p>\n
Three will voice its concerns later today at a Department of Culture select committee hearing set up to discuss the way spectrum is being allocated.<\/p>\n
Further delays<\/span><\/p>\nO2 and Vodafone are unlikely to sell off any of their assets, according to Mr Howett.<\/p>\n
“It is simply too valuable to them and they would only trade it if they were forced to,” he said.<\/p>\n
What may force their hand is the upcoming 4G auction in which Ofcom has set caps on the amount that can be bought.<\/p>\n
It will mean the operators with more existing spectrum will be able to buy less of the more valuable 4G airwaves.<\/p>\n
Ofcom has also ring-fenced some of the spectrum for new entrants such as Three.<\/p>\n
“It has done this because it recognised that 3 might not be able to survive and it values the disruptive nature of a player like 3,” said Mr Howett.<\/p>\n
But O2 said it was tantamount to “state aid” and has threatened legal action.<\/p>\n
Any further delays to the auction could put the UK behind other European countries in the roll-out of 4G services, said Mr Howett.<\/p>\n
4G will be crucial as the market continues to grow.<\/p>\n
According to Ofcom there are now 80 million mobiles in the UK, 12.8 million of which are smartphones.<\/p>\n<\/div>\n<\/p>\n
See more here:
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