There has been some major developments in the UK LTE market today as the regulator Ofcom announced that it will permit Everything Everywhere (the Orange/T-Mobile merger) to re-farm its 1800MHz spectrum for use with LTE. Ofcom has now issued “varied licences to EE which authorise LTE services from 11 September 2012”, and it has told Telecoms.com that it had plans to launch in “certain key locations in the UK by the end of this year”.
The results – howls of protest from the EE’s UK rivals. Their issue is that as they don’t hold licenses for 1800MHz they will have to wait for next year’s auction, currently set to start at the start of 2013, for the chance to bid for 800MHz and 2600MHz spectrum. This could put them almost a year behind in the LTE marketing stakes.
Ofcom said its decision was because, “delaying doing so would therefore be to the detriment of consumers.”
Vodafone though has said quite the opposite claiming that, “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.”
Analysing this, Vodafone is trying to suggest that consumers will be better served by having them wait for everyone to launch at once – which doesn’t really hold up. Certainly EE will have a competitive advantage by offering LTE first as there’s serious pent up demand for LTE. Yes, in the long term, consumers will be able to benefit even more from competition in the market once the rest of the players get hold of spectrum via the auction but undoubtedly they will benefit by having access to it as soon as possible
Of course, it won’t matter who has an LTE network if the devices aren’t there. As Informa’s Principal Analyst Thomas Wehmeier says, “Another critical task that lies ahead for EE will be to convince the world’s leading device manufacturers to build smartphones for their network. You can build the network, but without the right devices the customers cannot and will not come”
On the mobile broadband side, it shouldn’t be too much of a problem as the device eco-system is growing, ZTE is producing 1800MHz dongles for CSL in Hong Kong for example. But on the devices side it’s a bit more limited. In Australia, Telstra is offering the HTC One XL, Velocity, the windows-based Titan 4G, and the Samsung Galaxy SII. However, the flagship Galaxy SIII is not LTE 1800 capable. The other big one of course is the iPhone 5. No one knows what that will support LTE at all, and if it does, at what frequencies, but if 1800 is in there, it will be a massive win for EE. (If not Apple and EE will have to be careful, to avoid the hoopla around the iPad’s 4G incompatibility with European and Australian LTE).
What’s really interesting is this from Informa’s Wehmeier. “The ruling issued today applies to the full chunk of 1800MHz spectrum that Everything Everywhere owns in the UK, including the 2x15MHz that it is being forced to divest as a result of conditions imposed on the Orange-T-Mobile merger by the European Commission. The clarity on the potential use of that spectrum will provide fresh impetus to the sale negotiations with Hutchison 3G (3) the clear favourite to land the spectrum. The sale must be finalised by 30 September 2012 meaning the UK could conceivably see two 4G networks up and running by Christmas.”
So after years being behind the 4G curve we may get two networks at once. It’s a funny old world.