UK's largest ever spectrum auction delayed

[Ben]

UK incumbent mobile operators bully Three, OFCOM.

The government's largest ever spectrum auction has been delayed, with the multibillion pound sell-off now expected in the second quarter of next year at the earliest.

The airwaves being sold as fourth generation (4G) licences will be reserved for mobile phone carriers, to help cater for the explosion in mobile broadband use.

Telecoms watchdog Ofcom had been expected to publish the terms of the auction this month, but after veiled threats of legal action from a number of carriers including O2, the document will not now be ready until November. This means the auction can no longer begin as planned in the first quarter of 2012.

An Ofcom spokesman said: "We are still aiming for the first half of next year. However, we have always maintained it is an ambitious timescale."

Continues: http://www.guardian.co.uk/business/2011/sep/05/uk-spectrum-auction-delayed

[Hands0n]

This is thoroughly disgraceful. Self-interest by the mobile operators, petulance, belligerence and bullying by the "big four" operators has done nothing but set the UK behind the rest of Europe and the world. They should hang their heads in shame. We are now not going to see a viable LTE availability until 2014 at the earliest.

And what of OFCOM? What on earth is the regulator of telecommunications doing bowing down to the mobile operators. Why is OFCOM showing its yellow streak to the operators? Surely all this will do is to give the operators the courage to beat up OFCOM for its hand in the tightening of roaming rates (yes, it was the EU but OFCOM are in the mix, and nearer to home).

In my view OFCOM should have batted away all threats of legal action by the mobile operators and got on with the business of auctioning off the LTE spectrum. If there are any operators who didn't want to be in the game then that is well and good. I am certain that whichever operators picked up and deployed LTE would have been able to fill in any gaps from those that were behaving like spoilt brats.

Really, I would dearly like to see OFCOM man up, grow a pair, and get on with the business of ensuring that the UK has a world leading telecommunications system. Regardless of the operators dinosaur mindset.

Edit: I reckon that OFCOM should cancel the permission for operators to re-farm mobile data to the 900Mhz spectrum. Unless, of course, those same operators were to play ball, stop interfering and delaying, and get with the programme.

[hecatae]

strange, but EE and Three might actually benefit from this: http://www.ispreview.co.uk/story/2011/09/05/virgin-media-business-signs-big-mobile-broadband-capacity-deal-with-uk-operators.html


UK ISP Virgin Media Business (VMB) has today signed a significant new £100 million+ deal to provide the Mobile Broadband Network Ltd. (MBNL), a Joint Venture network sharing and management company between T-Mobile , Orange and Three (3) , with a high capacity Ethernet based mobile backhaul service (Sync-E) that will "enable" customers to benefit from future "super-fast" 4G / Mobile Broadband services.

It's understood that VMB will build 14 regional aggregation networks across the UK to enhance MBNL's bandwidth capacity for both existing 3G and future 4G mobile data services. Phase One of the deployment will see MBNL gain 1Gbps (Gigabits per second) of new Ethernet connectivity. The whole project will take 18 months to complete.

I cant see O2 or Vodafone with that kind of backhaul capacity anytime soon

[Ben]

Hm I'm not sure. O2 and Vodafone will be using BT fibre and I don't believe there's any shortage of capacity; just takes time and money to get it done.

MBNL using VMB will more likely have cost motives than performance ones, IMHO.

I agree with Hands0n re: scrapping 2G spectrum refarming. The regulator must state that operator interference has delayed the planned auction timetable and therefore the spectrum refarming may signify a competitive advantage for certain operators, and therefore all new deployments of 3G in traditionally 2G frequencies must be halted immediately with a timetable to removing anything already in service. I suppose, on reflection, it was a little hasty :(

[DaveC]

OFCOM can't withdraw 2G spectrum refarming as it was a European decision.

[Hands0n]

Sensible back haul is absolutely vital to existing 3G/HSPA/HSPA+ services, never mind LTE/4G that is still the better part of 2-1/2 years away.

Re OFCOM and the EU - our so-called partners in Europe seem to be able to take unilateral decisions that are contrary to the laws passed. I don't see why the UK (OFCOM) couldn't take a leaf out of the French/German/Italian book and call a moratorium on permitting 3G on the lower frequencies. It is, as Ben rightly says, anti-competitive.

Certainly, in the UK, LTE is likely to join this nation's growing list of cock ups.

[DaveC]

I don't think it's anti completive at all. 3 in particular based their whole business on being able to deliver at 2100 they fact that they couldn't can't be blamed on anyone else.

Remember, if it wasn't for Europe you would still be paying horrendous roaming charges.

OFCOM is considered one of most ineffective regulators, not only in the UK but in the whole of the EU

[Hands0n]

Ah, yea but, no but, yea :)

When Three entered the 3G arena it was a level playing field. All of the network operators were compelled to deliver their 3G services over 2100. And in that respect they all faced exactly the same circumstances, good and bad. In effect, all of the networks based their whole 3G business on being able to deliver on 2100.

Fast forward to 2011 and the allowing of 3G to be delivered on 2G frequencies, with all of the known and recognised benefits, it becomes anti-competitive to those networks that do not have 2G spectrum.

Roaming charge reductions can be attributed to almost a single EU commissioner, Viviane Reding. She was fairly tireless in beating back all of the European mobile network operators, most of them still PTTs. Under the GSMA there was formidable opposition, and had they succeeded then we'd be exactly where we were before Ms Reding climbed upon her bandwagon.

Three have been probably the most effective disruptor in the UK mobile market place. Without their presence the "big four" would still be lumbering along charging us through the nose for "premium" services such as mobile data. It would be a big setback for UK customers if Three went to the wall or was acquired and merged into one of the [now] big three.

I have dealings with OFCOM from time to time. Never in my entire years in and around the industry have I met such a shambolic outfit.

[Ben]

I have to agree with Hands0n, DaveC. I think it's anti-competitive when all the networks buy 3G licences at market rates (and so a level playing field), and then the regulator moves the goalposts and allows networks with 2G spectrum to deploy 3G in it without reallocating that frequency at market rates first.

It leaves Three significantly disadvantaged at no fault of it's own.

Three have delivered 3G at 2100MHz ably. Certainly better than anyone else. If anything they should be rewarded for that, not punished.

[DaveC]

But to redistribute the 900 spectrum would mean a massive loss of GSM capacity for the present incumbents. OK, you could give them some of the 1800 which Everything Everywhere are supposed to give up but haven't as yet.

However, the argument is about the distribution of the sub 1GHz frequencies on offer and how much of that 3 and EE get. Problems arise if they get the lion's share as O2 and Vodafone are then disadvantaged as they still have to deliver GSM at Sub 1GHz - so all of their bandwidth will not be available for use.

Personally, I think it was a mistake to allow a 5th operator into the market. We have not really had the competition the government expected and other countries seem to run just as well with 3 or 4. It just complicated things to have a 2100 only operator

[Ben]

I suppose it's not so much the reallocation of 900MHz as the fair allocation of all the sub 1GHz bands in general before allowing anyone to put 3G in them - yes, some 900MHz shifting would need to take place, but there's the digital divided that can/will be allocated at the same time.

The caps that have been discussed on how much sub 1GHz spectrum can be owned by any one operator should ensure that all the big players get something usable.

I hear you WRT O2 and Vodafone having a lot of legacy customers on 900MHz GSM and that they have a certain requirement of some of that frequency in order to continue providing the service. At the end of the day, GSM is going to have to die at some point.

[Hands0n]

See I would have to disagree with DaveC's thoughts on the fifth operator. Look at how cosy it all was before 03/03/03. There was pretty much zero competition out there. Everyone had similar tariffs and offerings. Mobile data was unthinkably expensive, I was using GPRS in the bank I worked for at the time. PAYG was something like 35p a minute (I recall Genie (O2) broke the back of that a little). The cosy GSMA gentlemans club was working at full steam. They were bullet-proof. The customer just had to put up with what they got. Operators ruled the manufacturers, they were kings.

Without question, I believe, a fifth operator, a disruptor, was vital to the UK market. Things started to change very soon after their arrival. The big four, and GSMA, have had to be dragged kicking and screaming all the way into 2011. They're still at it, witness the cock up that is now LTE where the UK will be so far behind the rest of the world in 2014 it will be laughable if it weren't so serious.

As you can tell, I am all for the little guy (who really isn't so little these days). I want a fifth (well, now back to a fourth) operator to make the other three sit up and take notice. I want the disruptor to constantly nip at the heels of the incumbents. I want them to make the established operators feel very uncomfortable indeed. For it is only then that we will see real competition in the UK. As indeed we're seeing in handsets as the manufacturers wrestle the ownership of what constitutes a smartphone away from the network operators.

Now de-regulate the airwaves, balance the market properly and let the newer operator do business on a level playing field. We did it with the banks, other telecoms and utilities. The same needs to happen with the airtime providers. In my opinion of course :)

[DBMandrake]

For evidence of what lack of competition can do, look no further than my homeland of New Zealand :(

Although NZ is well ahead of the UK in terms of 850/900Mhz 3G coverage, with both incumbents Vodafone NZ and Telecom NZ having near nationwide 3G coverage on 900Mhz and 850Mhz respectively since at least 2009, pricing continues to be atrocious due to an almost balanced duopoly where Vodafone NZ has 55% of the market and Telecom NZ has about 45% of the market. (With new entrant "2degrees" somewhere in the 1% range)

Have a look at "prepay" (Pay&Go) pricing of both networks:

http://store.telecom.co.nz/mobile/prepaid/plans (Telecom)

http://www.vodafone.co.nz/shop/planPrepay.jsp?plantype=mobile&billingMethod=prepay&menuKey=mnit100011 (Vodafone)

To convert dollars to pounds, and cents to pence, roughly divide by 2.

So what do we get for data ?

On Telecom the casual data rate is $1 for 10MB for one day. Yes that's right, 50p gets you a whopping 10MB :P

Data addons - $6/month for 50MB, $12/month for 120MB, and $18/month for 240MB. There are no options higher than 240MB/month on prepay.

Atrocious.

How about Vodafone then - VERY confusing website, but it appears that on Supa Prepay if you top up a minimum of $20 a month, you get a "Free" 50MB of data included. Woohoo! ;)

Data addons include "Broadband Lite" which is $10/month for a paltry 100MB, and a 1GB mobile data addon for $20/month which is not available on any prepay plan - only on monthly/contract.

Yech...

Vodafone New Zealand made themselves famous (or should that be infamous) upon the launch of the iPhone 3G - the first iPhone model sold in New Zealand, by pricing their contract iPhone plans as the most expensive iPhone contracts in the entire world. Nice work Vodafone... :p Prices have dropped since then but are still ridiculously high, and Vodafone are still the only official carrier for the iPhone in NZ. (Although Telecom's network will work if you manually enter the settings in an unlocked iPhone)

So yes, we have the right to complain about coverage here in the UK, (3G coverage and coverage in general in NZ is much better than here, despite the low population density and lots of remote areas) but the UK definitely beats NZ hands down when it comes to pricing, and despite feisty new entrant 2Degrees, things don't look like they will change significantly from the years of lock step price collusion between Vodafone and Telecom, as 2Degrees are simply too small to make a dent. (Far smaller than Three by percentage of market share)

http://www.2degreesmobile.co.nz/prepay (2Degrees)

[Hands0n]

See, that is what worries me (if I worry at all) about the Orange/T-Mobile merger into EE. At a stroke competition is reduced. If anyone looks closely they will see that Orange executives have replaced pretty much all of the T-Mobile executives at the top. That means that EE is Orange in all but name, a reduction of mobile network operators to just four again.

The new, larger and more powerful EE will have a significant influence at the GSMA and when lobbying OFCOM and Parliamentarians. Alongside the equally mighty Vodafone and O2 (those famous owners of the Greenwich Peninsula tent) Three looks like a minnow, and we can already see the harm in that in respect to the imbalance being introduced into 3G by use of the lower frequencies. I honestly do not believe that we would witness a similar disparity being introduced by any other regulator into any other field (ie. utilities). So it is particularly shocking that we see this happening in mobile networks.

[DaveC]

There is lots of disparities in utilities. The number of suppliers is falling and I have no choice in who supplies my water. Fuel prices rise an the regulator does nothing - not much difference then.

You might have seen this http://www.mobiletoday.co.uk/News/12577/Three_voices_concerns_to_European_Commission_over_ exclusion_from_UK_mCommerce_deal.aspx

Looks as if the big boys have the ball and not letting the little ones play

Of course it is not just 4 networks - Tesco, Virgin, Asda, GifGaf et al all have to be taken into considered when we talk of consumer choice.

[3GScottishUser]

I recall the 1980s when most cities had one commercial radio station and overnight the IBA (forrunner of Ofcom) allowed each of them to offer different services on AM and FM. No competition or much discussion just a hand out to those who already had the market. This was done to deliver choice to listeners as quickly as possible and it worked pretty well in most areas allowing commercial operators to compete with BBC radios 1 & 2.

Ofcom are between a rock and a hard place with 850Mhz spectrum allocation as they want capacity increased as quickly as possible. They probably have the right idea offering it to all current operators and maybe some new ones too as this will produce the fastest rollout of the technology. 3 may have been first to market with 3G in 2003 but lets not forget how wrong they got the proposition and one has to wonder if history could repeat itself with 850Mhz.

As for the refarming of 900Mhz, 3 and the others knew what spectrum others had when they bid for 3G licences and could have predicted that 900Mhz would be used for 3G services in due course. 3 has more 2100Mhz spectrum than all the others so that should compensate to some extent although there is little evidence that they have or ever will have the market power to have any great influence in the UK mobile market. 3 are now trying to become a people's champion by providing free 2100Mhz broadband in a few rural areas for a limited period but that looks like a publicity stunt and looks set to be outdone by free Wi-Fi by Virgin, BT and 02 in due course. BT already have 1000's of hotspots thanks to Fon which provides open access via their network of domestic and business broadband subscribers.

There is a limit to the protection 3 or any other network should receive otherwise the market will become distorted and competition will be reduced. Hopefully the 850Mhz auction will not be delayed too long and all of the providers will be able to offer services on it in addition to what they already provide.

[Wilt]

They probably have the right idea offering it to all current operators and maybe some new ones too as this will produce the fastest rollout of the technology. 3 may have been first to market with 3G in 2003 but lets not forget how wrong they got the proposition and one has to wonder if history could repeat itself with 850Mhz.
Three wasn't the only network to get it wrong - they all did. I remember my first 3G phone on Vodafone, came full of vodafone live rubbish which boasted mobile sky TV as its headline feature. This was a dumbphone with a screen of about 1.5", if that! The fact is at this point even smartphones were crap for surfing the internet, so video calls, mobile TV etc. were the only differentiator the operators could use to sell 3g. No point selling me web surfing on my phone when the BBC were still showing me a text only site designed for WAP.

Not saying Three had a perfect launch, far from it (I think they underestimated the amount of coverage they needed to provide without roaming massively) but to say it's only the new players who get it wrong is silly. If anything, they are more likely to get it right since they NEED to. The incumbents can always rely on the old cash cows.


As for the refarming of 900Mhz, 3 and the others knew what spectrum others had when they bid for 3G licences and could have predicted that 900Mhz would be used for 3G services in due course. 3 has more 2100Mhz spectrum than all the others so that should compensate to some extent although there is little evidence that they have or ever will have the market power to have any great influence in the UK mobile market.

Well, not really. If it was thought that existing spectrum was going to be refarmed then the auctions wouldn't have got anywhere near as out of control as they did. Why would BT bid so much that they would eventually have to spin off their network if they knew they'd be able to roll out 3g for free later on?

I'd say they already do have great influence. Their customer base is expanding while the other four are contracting. Their entire proposition is based around data, while the rest are still trying to flog you minutes and texts with a little bit of data tacked on. Three are selling more smartphones and mobile broadband dongles than the other networks and seem to be taking the data use explosion in their stride, while the other networks look completely inept at keeping up with customer demand.


3 are now trying to become a people's champion by providing free 2100Mhz broadband in a few rural areas for a limited period but that looks like a publicity stunt and looks set to be outdone by free Wi-Fi by Virgin, BT and 02 in due course. BT already have 1000's of hotspots thanks to Fon which provides open access via their network of domestic and business broadband subscribers.
Yeah because I can't get away from the hundreds of BT Openzone wifi hotspots in range when I'm miles away from anything. They're two completely different propositions. Wifi hotspots are great for when i'm sat in Starbucks. Not so good when my nearest neighbour is a 2 minute drive away and BT can't even sell me a reliable fixed line internet connection.

[DBMandrake]

As for the refarming of 900Mhz, 3 and the others knew what spectrum others had when they bid for 3G licences and could have predicted that 900Mhz would be used for 3G services in due course.

Easy to say in hindsight, but at the time the 2100Mhz spectrum auctions occurred no country in the world allowed UMTS operation on
They couldn't predict this any more than they could predict 10 years in advance the spectrum dividend from the analogue TV switch-off. Sure, you could have predicted back in 2001 that "one day digital TV will take over from analogue, freeing up frequencies", but "one day" is not much of a business plan to rely on is it ?

Three were silly to enter the market as a 2100Mhz only 3G provider though, and I've said as much before. 2100Mhz is simply not suited to ubiquitous coverage, and should only ever be used for capacity fill-in. In this regard, the entry of Three into the market as a 3G only network was ill conceived to say the least.


3 has more 2100Mhz spectrum than all the others so that should compensate to some extent

Not the first time you've made this misleading claim. Three have 15Mhz (3 channels) of 3G spectrum, but prior to the 900Mhz re-farming so did Vodafone.

O2, T-Mobile and Orange each had 10Mhz, but Orange and T-Mobile have now merged, so as soon as their networks are actually merged (currently being held up by litigation from their network contractors) they will have 20Mhz, unless OFCOM forces them to sell some off.

O2 and Vodafone can both re-farm 900Mhz spectrum for 3G, to do so they must allocate a minimum of 5Mhz, as 3G requires 5Mhz sized blocks. O2 have already done so, Vodafone are either dragging their heels or aren't shouting about it.

Also, 1800Mhz is now allowed to be used for 3G as well, although not many devices currently support it. T-Mobile and Orange both have a lot of 1800Mhz, while O2 and Vodafone have some as well. Three is the only network without 1800Mhz.

So the real situation after the completion of the Orange/T-Mobile network merger, and the roll-out of re-farmed 900Mhz spectrum by O2/Vodafone is:

Three: 15Mhz at 2100Mhz only
Everything Everywhere: 20Mhz at 2100Mhz, and the option to re-farm some 1800Mhz for 3G.
Vodafone: 15Mhz at 2100Mhz, and at least 5Mhz at 900Mhz = 20Mhz+, and also with the option to re-farm some 1800Mhz.
O2: 10Mhz at 2100Mhz, and at least 5Mhz at 900Mhz = 15Mhz+, and also with the option to re-farm some 1800Mhz.

From this Three are clearly in the weakest position both in total bandwidth, and in a lack of anything other than 2100Mhz, with its coverage and penetration problems.

If Three miss out on a sizeable chunk of low frequency spectrum that could be the end of them.


There is a limit to the protection 3 or any other network should receive otherwise the market will become distorted and competition will be reduced.

You mean like the distortion where 5 networks paid billions of dollars for 3G spectrum in 2001 on the understanding that this was the only frequency range where 3G could be used, and then 10 years later OFCOM says to two of them, "oh, you know that high value low frequency spectrum you already have ? You can use that for 3G now too, for free. And you can use it several years before the spectrum auction that will give similar access to your competitors".


Hopefully the 850Mhz auction will not be delayed too long and all of the providers will be able to offer services on it in addition to what they already provide.
Unfortunately it's in Vodafone and O2's best interests to litigate as much as possible so they can get the jump on everyone else. If they can drag it through the mud long enough it will give them a several year advantage in low frequency 3G roll-out. If that's the type of market competition you hope for, it looks like you'll probably get your wish ;)

[3GScottishUser]

Not the first time you've made this misleading claim.

But it's far from misleading as Hutchison 3G UK were provided with 5Mhz of unpaired 2100Mhz spectrum more than other operator when the UK 3G licences were awarded. H3G UK were awarded this as the winner of 3G licence 'A' in 2000 which was reserved for new entrants only.

I expect a swift and clear apology for the nasty acquastion made about the truthfullness of the information I posted relating to this matter.

[Wilt]

But it's far from misleading as Hutchison 3G UK were provided with 5Mhz of unpaired 2100Mhz spectrum more than other operator when the UK 3G licences were awarded. H3G UK were awarded this as the winner of 3G licence 'A' in 2000 which was reserved for new entrants only.

I expect a swift and clear apology for the nasty acquastion made about the truthfullness of the information I posted relating to this matter.

No apology from DBMandrake is necessary. Add 25Mhz (licence D) to 25Mhz (licence E) and you'll find that Everything Everywhere has 50Mhz of 2100Mhz spectrum. Thus meaning your earlier statement that Three has more 2100Mhz spectrum than the other operators is inaccurate.

[3GScottishUser]

No apology from DBMandrake is necessary. Add 25Mhz (licence D) to 25Mhz (licence E) and you'll find that Everything Everywhere has 50Mhz of 2100Mhz spectrum. Thus meaning your earlier statement that Three has more 2100Mhz spectrum than the other operators is inaccurate.

But the point is that is the situation currently......NOT when licences were awarded in 2000 and for the last 10 years! H3G UK have more 2100Mhz 3G bandwidth than any other network in the UK (Orange and T-Mobile whilst merged into Everything Everywhere presently operate two separate licenced 3G networks). H3G UK have the largest allocation of 2100Mhz spectrum to a single UMTS network operator in the UK and always have had.

[DaveC]

Gentlemen please. Think - If you are arguing about allocation, spare the poor networks :D

[3GScottishUser]

On checking the relevant websites I note that Orange and T-Mobile don't even offer roaming across their repective 3G networks presently. Roaming only applies to 1800Mhz GSM and is not due to be extended to 2100Mhz UMTS until the end of 2011. Even then it will be 'roaming' and not a merged network, probably because they have separate licences for each and it will take regualtor approval to combine them, if that is ever agreed.

Orange and T-Mobile make it clear on their respective websites that roaming has been provided to increase coverage and does not integrate any of the exclusive features customers have on either network. They do not even consider cross network calls between Orange and T-Mobile as inclusive where customers have magic numbers etc.

So in the future EE might have more bandwidth on 2100Mhz but not presently and at no point in the last 10 years has any network had more than H3G UK.

It will be interesting as things develop to see how the refarming of 900Mhz affects network performance. 02 were quick off the mark and have refarmed 900Mhz to UMTS in many major cities and have been publicising that fact on their website. Vodafone are now refarming but making less noise about it although they have quietley been introducing HSPA+ across the UK. EE have stated they have no incentive to refarm 1800Mhz to 3G due to a lack of handsets that support the technology. Hopefully that will change as new models are introduced from Q4 2011.

See: http://blog.o2.co.uk/home/2011/05/superfast-900mhz-3g-explained.html

The FT have published a chart showing customer numbers at Dec 2010 and the mobile bandwidth allocations of the various networks and its clear from that H3G UK have more available bandwidth per customer than 02 or Vodafone presently. The issue about the refarming seems to be about the robustness of the signal especially in cities rather than about capacity solely.

http://www.ft.com/cms/s/0/df1debe8-7446-11e0-b788-00144feabdc0.html#axzz1XntYxv82

[Wilt]

But the point is that is the situation currently......NOT when licences were awarded in 2000 and for the last 10 years! H3G UK have more 2100Mhz 3G bandwidth than any other network in the UK (Orange and T-Mobile whilst merged into Everything Everywhere presently operate two separate licenced 3G networks). H3G UK have the largest allocation of 2100Mhz spectrum to a single UMTS network operator in the UK and always have had.
But that isn't what you said if you go back and read it. You said "3 has more 2100Mhz spectrum than all the others so that should compensate to some extent", which is not right. Obviously you worded it incorrectly and that isn't what you meant, but no 'swift and clear apology' from anybody is needed.


On checking the relevant websites I note that Orange and T-Mobile don't even offer roaming across their repective 3G networks presently. Roaming only applies to 1800Mhz GSM and is not due to be extended to 2100Mhz UMTS until the end of 2011. Even then it will be 'roaming' and not a merged network, probably because they have separate licences for each and it will take regualtor approval to combine them, if that is ever agreed.

Orange and T-Mobile make it clear on their respective websites that roaming has been provided to increase coverage and does not integrate any of the exclusive features customers have on either network. They do not even consider cross network calls between Orange and T-Mobile as inclusive where customers have magic numbers etc.

So in the future EE might have more bandwidth on 2100Mhz but not presently and at no point in the last 10 years has any network had more than H3G UK.

It will be interesting as things develop to see how the refarming of 900Mhz affects network performance. 02 were quick off the mark and have refarmed 900Mhz to UMTS in many major cities and have been publicising that fact on their website. Vodafone are now refarming but making less noise about it although they have quietley been introducing HSPA+ across the UK. EE have stated they have no incentive to refarm 1800Mhz to 3G due to a lack of handsets that support the technology. Hopefully that will change as new models are introduced from Q4 2011.

See: http://blog.o2.co.uk/home/2011/05/superfast-900mhz-3g-explained.html

The FT have published a chart showing customer numbers at Dec 2010 and the mobile bandwidth allocations of the various networks and its clear from that H3G UK have more available bandwidth per customer than 02 or Vodafone presently. The issue about the refarming seems to be about the robustness of the signal especially in cities rather than about capacity solely.

http://www.ft.com/cms/s/0/df1debe8-7446-11e0-b788-00144feabdc0.html#axzz1XntYxv82
Everything Everywhere have made it very clear that that they intend to merge the two networks together, both 3g and 2g. As far as I have seen, this should have already commenced however is being held up by litigation from Arquiva. The important point here is that while in terms of brand T-Mobile and Orange are being kept separate (for now), but operationally and legally there is the full intention, with moves under way, to completely merge the two. It's not a case of two operators with separate licenses who happen to be loosely related by the same parent company. Decisions being made now both by EE and the other operators are based on the fact that EE have two licences worth of 2100Mhz.

But you are right, the amount of 2100Mhz allocated isn't the issue here, however that does bring us back to the point which you were trying to dismiss by bringing up Threes large 2100Mhz allocation, that the refarming of 900Mhz and 1800Mhz spectrum is unfair and has put Three at a disadvantage.

[3GScottishUser]

But you are right, the amount of 2100Mhz allocated isn't the issue here, however that does bring us back to the point which you were trying to dismiss by bringing up Threes large 2100Mhz allocation, that the refarming of 900Mhz and 1800Mhz spectrum is unfair and has put Three at a disadvantage.

I think EE have some licence negotiations to conclude with Ofcom as well as the contractual matters to conclude if they want to fully merge their Orange and T-Mobile networks.

That aside 3 UK have always been at a commercial disadvantage due to the lack of their own GSM fallback. That did not prevent HWL ploughing in billions to compete. The refarming is for Ofcom an opportunity to increase the efficiency of existing spectrum and to do so as quickly as possible therefore a licence amendment to the existing operators was probably the fastest way of achieving those goals. To be fair 3 UK have had a fair share of decisions made in their favour including recent changes in termination fees. They can't expect to win every argument especially with their track record in the UK marketplace.

[Hands0n]

My own view on this is that the introduction of 3G at 900Mhz introduces a completely unlevel playing field that puts Three at a marketing disadvantage, if not a practical one. The company has honoured its 3G licence terms completely by pushing out 3G into the country as widely as has been economically viable. Their work with MBNL has seen that deployment rationalised in conjunction with T-Mobile where mast shares have allowed Three to get around local planning issues and avoiding the rather large NIMBY population that we seem to have (all of whom, I'd contend, carry mobile phones upon their persons).

The way things stand at the moment, the OFCOM ruling allows the "big four" networks to increase their 3G coverage for almost no particular investment, while Three has to continue to fund the physical deployment of cells to compete. In any other trading environment the Competition Commission would be involved. So I call shame on the regulator, OFCOM, for permitting this to happen and risk the only truly innovative mobile network operator the UK has.