Everything Everywhere, the UK’s largest mobile operator in terms of customer numbers, has announced that it has appointed Morgan Stanley to sell spectrum that could be used to roll out 4G mobileservices in the UK ahead of other rival operators. Roughly 25 percent of the 1,800MHz spectrum controlled by Everything Everywhere is jointly owned by France Telecom and Deutsche Telekom. The spectrum will be marketed this month by Morgan Stanley to those groups which have an interest in setting up a 4G network in the UK. The sale has been forced on Everything Everywhere by the competition authorities under the terms of approval for the merger between T-Mobile and Orange in the UK.
The leading operators are the most obvious buyers of the spectrum, which could cost as much as £400m, although other large technology groups could also be interested. Under the terms of the sale, there is a key requirement that the buyer of the spectrum will need to have the capability to establish a network. Olaf Swantee, chief executive of Everything Everywhere, told the Financial Times that the purpose of the sale was to encourage competition by finding a company that could create a rival service. “Whoever we sell to has to be approved by the competition authorities. The test is someone who can provide genuine competition,” he said.
Several operators are eager to launch superfast “4G” networks in the UK. These networks are designed specifically to carry data-heavy internet services such as gaming and mobile. However, the auction of suitable bandwidth for this has been long delayed as the authorities have tried to create an acceptable structure for the process.
The auction of 4G assigned spectrum – which is at the 800 MHz and 2.6 MHz frequencies – is now pencilled in for the end of the year although it could still face further delays because of the understandable concerns among other leading network operators. Everything Everywhere, however, has requested that the spectrum at the 1,800 MHz frequency be assigned for 4G use in line with European directives by Ofcom, the telecoms regulator. Ofcom is supportive of the move, although opposition from its rivals has emerged during the consultation period.
Even so, Mr Swantee said that he was confident that Everything Everywhere would be able to launch 4G services using these frequencies before the end of the year. Mr Swantee said that Everything Everywhere would also be required to provide access to this 4G enabled network to rival network, Three, under the orders of the competition authorities, although this would need to be agreed under commercial terms.
This raises the possibility of several networks capable of carrying 4G services even ahead of the much delayed auction of suitable spectrum. He said: “We are confident that this spectrum will be liberalised [and] we can get 4G before the end of the year. The time period of any advantage [that EE may have] is not long.”