Deregulation proposals threaten mobile telcos

25 November 2004 UK telecoms regulator Ofcom is to relax regulation of the civilian radio spectrum – letting 3G operators roll out network coverage more slowly but potentially opening up the wireless market to new entrants.

The current owners of third-generation (3G) licences – Orange , 3, 02, T-Mobile and Vodafone – have been pressuring Ofcom to extend the 2007 deadline for achieving network coverage of 80% of the UK. Ofcom’s Spectrum Framework Review granted their wish but also recommended that market forces, not regulators, should dictate future decisions on radio spectrum allocations.

This decision, coupled with proposals to open up more licence-exempt spectrum to businesses and allow spectrum trading, could prompt a flood of new competitors to enter the mobile market. “This market-led approach to spectrum management will reward innovation and extract the maximum value for customers from this important resource,” said Stephen Carter, Ofcom’s CEO.

Ofcom expects to have deregulated up to 7% of the radio spectrum by 2010, although it has would be able to loosen its grip on up to 70% of the overall spectrum.

Each of the five 3G licences cost the networks between £4 billion and £6 billion at auction in 2000, raising a lot of money for the Government but placing a high barrier on entering the mobile market. The subsequent controversy made this review Ofcom’s first priority when it was created in December 2003.

While network service providers may not respond favourably, other tech companies – notably Microsoft and Intel – will be pleased with a lobbying job well done after they missed out on the initial mobile phone revolution. Interested parties have until 15 February 2005 to respond to the review, which is available in full at . Ofcom will publish a consultation document into 3G and wireless broadband in December 2004.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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