Ofcom to Restrict Buying Power of BT/EE in Spectrum Auctions


Across the pond in the UK, the wireless world might not seem all that different, but the times, there are a-changing in the UK. Just as in the States, there are four major UK networks to speak of, those being O2, Three, Vodafone and EE (which was formed of the merging of Orange and T-Mobile). Last year, UK telecom giant, BT, put forward plans to purchase EE for £12.5 Billion ($19 Billion) and the deal was approved earlier this year. For those not familiar with BT, they’re the UK’s largest broadband supplier of Internet to the home, as well as offering TV and standard phone services. As such, the joining of BT and EE presents the industry with a telecom giant that has the largest home broadband network, as well as the UK’s largest wireless network, too. Fearful that this power, as well as the deep pockets of BT, could be abused in the future, the UK’s Office of Communications, known as Ofcom, is putting some restrictions in place.

Spectrum Auctions are events that see regulators such as Ofcom sell off the rights to broadcast on those allocated wavelengths. As such, networks try their best to spend as much money buying as much spectrum as they can, as it enables them to build out better networks that are often faster, and can cover larger distances. Next year, Ofcom is to start an auction for 190 MHz of spectrum in both the 2.3 GHz and 3.4 GHz bands, which could help networks across the UK extend 4G LTE reach by as much as a third. The regulator has, however, forbidden the combined forces of BT and EE from taking part in said auction, at least where the 2.3 GHz spectrum is concerned. They’re free to bid on the 3.4 GHz bands as Ofcom deem that this isn’t immediately-usable in the market, and has been “put aside” for use in future 5G networks. Even so, this is how EE initially got the upper-hand with 4G networks a year before anyone else, as they already had spectrum and systems in place to go ahead with 4G LTE.

As it stands, BT and EE together have as much as 45 percent of the UK’s usable spectrum, as EE own much of it, but BT has spent some of their own money in the past on spectrum. Should BT and EE be able to bid for 2.3 GHz spectrum next year, it would make it difficult for other networks such as Vodafone, O2 and Three to compete and purchase spectrum to improve their own networks, to play “catch up” in a sense. Either way, this will be music to the ears of other networks, and could help level the playing the field in 2017 and beyond, but we’ll have to wait and see.