Competitive services to kick off in the first half of 2013
Ofcom has bought forward the launch of UK 4G services for mobile network operators other than EE to early spring 2013, following a meeting of mobile operators Vodafone, O2 and Three UK with Culture Secretary Maria Miller.
The mobile operators have reached an agreement on the timing for the roll out of 4G services, while Ofcom has stated that the spectrum auction will take place at the end of this year, enabling competitive services to kick off in the first half of 2013.
Unlike EE, operators O2, Vodafone and Three do not have the spectrum required to launch 4G services; they need to buy spectrum in the digital dividend auction. Ofcom plans to start the auction process to release spectrum at the end of the year, with bidding starting early in 2013.
After discussions with TV broadcasters, Digital UK and the transmission company Arqiva, Ofcom has secured the earlier release of frequencies that were previously used for digital-terrestrial broadcasting.
This spectrum will now be cleared and ready for 4G mobile services across much of the UK five months earlier than previously planned, from spring 2013. This has only become possible in the past few months as a result of the significant progress that has been made to date with the digital switchover and the clearance programme itself, which has been running ahead of schedule, Ofcom stated.
Matthew Howett, leader of Ovum's telecoms regulatory practice, remarked: 'The auction timetable remains as before, however the timing of when operators can use the spectrum has been brought forward as a result of the peace talks. The early clearance of the 800MHz, which has traditionally been used for analogue TV, has appeased operators who were particularly concerned that EE would have been given a significant head start. After more than five years in the making, finally the schedule to award spectrum for 4G appears to have been agreed.
'Consumers will only see the true benefits of 4G when there is competition between operators. Whilst it would've been ideal to have seen that from day one, at least, it's now set to arrive in months rather than years,' commented Howett.
Ed Richards, Ofcom chief executive, said: 'The actions we have taken with industry and government avoids the risk of significant delay and is tremendous news for consumers who might otherwise have waited a considerable period for the next generation of mobile broadband services. Ofcom's objective has always been to release the spectrum as early as possible and we remain focused on starting the auction by the end of the year.'
Mark Newman, chief research officer at Informa Telecoms & Media, commented: 'The progress that Ofcom has made in the timetable for clearing the new 4G spectrum is good news for Vodafone and O2 because it means that EE's period of LTE exclusivity will be cut from a year or more to only six to eight months. However, this is still an important window of opportunity for EE to capture significant market share from high end mobile users.
'The situation is similar, in many ways, to the periods of exclusivity granted to operators when the iPhone first launched,' Newman continued. 'O2 managed to cement itself as the leading UK operator during this period and associate itself with an aspirational product like the iPhone. EE is going to launch a major national advertising campaign in the coming weeks and the combination of an attractive new brand, faster speeds and the iPhone 5 (which will operate on the 4G network) is going to be a pretty compelling proposition. O2 and Vodafone are going to have to think really hard about how to freshen up their brands.'
In August Ofcom gave approval to an application by Everything Everywhere (now EE) to use some of its existing spectrum to offer a 4G service. Olaf Swantee, CEO at EE, has now announced the company will be launching its 4G services at the end of this month. He commented: 'We are delighted to announce that the official launch of our new customer brand, EE, offering the UK's first superfast mobile 4G and fibre broadband service, will take place on the 30 October 2012.'
At the time that Ofcom approved EE's 4G business, O2 stated: 'We are hugely disappointed with [the]announcement, which will mean the majority of consumers will be excluded from the first wave of digital services. This decision undermines the competitive environment for 4G in the UK.'
Yet Howett stated that all involved have been to blame for the dragged-out process: 'All parties have been to blame at some point during this long and drawn out process. Initially it was Ofcom for failing to appreciate how operators might actually intend to use the spectrum and its inability to take a joined-up approach, only to be followed by the government for taking its eye off the ball during the change of parliament once a way forward had been laid out. Finally, the operators themselves can't escape blame entirely either. For too long it suited them all too well to keep sending the matter back to Ofcom at a time when money was tight and the economic outlook uncertain.
'In many ways, Ofcom played an ace by allowing EE to launch 4G ahead of everyone else as it meant that for others to follow they needed the joint award of 800MHz and 2.6GHz to happen as soon as possible, something which now seems finally likely to take place. In a matter of weeks, the UK has gone from being behind countries such as Angola, Azerbaijan and Uzbekistan, to one with one of the most ambitious 4G roll out strategies we have seen.'
