Ofcom gives Orange the green light to launch an early 4G service on its existing bandwidth

Is Ofcom’s decision to give the Everything Everywhere network the go-ahead to launch its 4G service on its existing spectrum good news for businesses and consumers, or bad news for its fellow network competitors? Well, depending on who you speak to, the answer seems to be both. Ofcom and Everything Everywhere believe that the launch of the new service on 11 September, 2012, is generally good news for the country, and especially good news for business: Vodaphone and O2 are less enthusiastic and believe that the deal is not only unfair on the rest of the competition but will exclude the majority of mobile phone from the latest digital services.

The decision by the Telecoms regulator means that from 11 September Everything Everywhere, the owner of the Orange and T-Mobile networks, will be allowed to use its existing bandwidth to launch fourth-generation (4G) mobile services. The unexpected decision means that 4G, which allows much faster downloads, will launch in the UK earlier than previously planned. Ofcom claims the move will deliver “significant benefits” to consumers, ad that these benefits will outweigh any competition concerns. Rival service providers O2 and Vodaphone have expressed both surprise at the speed of the decision and disappointment at the lack of consultation. It is believed that other providers will only be able to compete when Ofcom starts to auction off 4the fourth generation bandwidth at some point next year.

Next year’s bandwidth auction will offer the equivalent of three-quarters of the mobile spectrum currently in use – some 80 percent more than released in the 3G auction which took place in 2000. Ofcom wants to see at least four wholesalers of 4G mobile services, so that consumers will benefit from better services at lower prices. The auction will sell chunks of radio spectrum to support 4G, which will allow users to download data such as music and videos at much faster speeds.

Although the regulator maintains that the timing of the decision is a commercial matter for Everything Everywhere, it argues that any delay to the decision would only have a detrimental effect on consumers. The company claims the decision is “great news for the UK”. A spokesperson for the company told the BBC:

“4G will drive investment, employment and innovation and we look forward to making it available later this year, delivering superfast mobile broadband to the UK.”

Vodaphone and O2 naturally think otherwise. The former is shocked, whilst the latter is said to be bitterly disappointed with the decision. Speaking to a BBC correspondent, a spokesperson for O2 claimed:
“We are hugely disappointed with today’s announcement, which will mean the majority of customers will be excluded from the first wave of digital service.”

Vodafone was even more forthright in its criticism of Ofcom:

“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.”

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