Three UK Not Happy With Ofcom Frequency Auction Cap

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UK wireless carrier Three is not happy with the government-imposed cap on the amount of the 3.4GHz frequency that could be obtained by incumbent wireless carriers. This cap was set by Ofcom, the telecommunications regulator of the United Kingdom. The agency will enforce a 37-percent cap on the amount of 3.4GHz frequency that any single carrier can win in the coming auction. This should prevent one carrier from gobbling up all the available spectrum, which in turn will protect the existing competition in the telecommunications industry. The carriers that will likely be most severely hit with the ruling are the BT-owned EE and Vodafone, which both currently own a large chunk of the usable spectrum. However, Three UK feels that the cap is not restrictive enough and may, in the long run, result in increased costs on the part of the consumers. Instead, the carrier proposes that the regulator should impose a 30-percent cap on the maximum amount of 3.4GHz spectrum that can be purchased in the coming auction.

There are four major wireless carriers that currently operate in the UK, which are EE, Three UK, Vodafone, and O2, However, EE and Vodafone currently own a massive chunk of the available spectrum. EE has licenses to use 255MHz of available spectrum while Vodafone currently has control of 176MHz of spectrum. In contrast, Three only has 90MHz of immediately usable spectrum at hand while O2 has 86MHz of available spectrum. Within the next few months, Ofcom is set to auction 40MHz of immediately usable 2300MHz spectrum, which could be utilized for existing LTE networks, and 150MHz of the 3400MHz band.

As the demand for mobile data continues to increase, the carriers will have to utilize additional spectrum in order to maintain the quality of service that it offers to its subscribers. Given the need for more spectrum, carriers are more than willing to pay exorbitant prices in order to purchase more of it. The 3400MHz band is of special importance to the carriers, as 5G technologies will likely utilize this spectrum. The carriers are very much interested in laying their hands on it as it could certainly affect their future viability as new wireless data technologies become more mature and widely utilized.

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