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Ovum comments: Ofcom's proposal to liberalise mobile licences
Matthew Howett, telecoms regulation analyst at Ovum, has the following reaction:
“Ofcom’s decision to liberalise the 900MHz, 1800MHz and 2.1GHz bands for 4G mobile services will on the whole be welcomed by operators and is fully in-line with other countries and Ofcom’s commitment to removing the previous command and control approach to spectrum policy. However despite operators being able to deploy 4G services in these bands previously restricted to 2G and 3G technologies, most are unlikely to do so in the short term. They would first need to be cleared of their existing use through a process of refarming that would probably takes years rather than months, and so the spectrum that is currently being auctioned by Ofcom will most likely be used for Vodafone, O2 and Three’s initial deployment of 4G services.
“As Ovum’s recent report “The Regulatory Consequences of Spectrum Refarming” shows, Ofcom’s previous proposals to liberalise the 900MHz and 1800MHz bands for 3G services were famously met with fierce opposition from some parts of the industry since at one point implied taking back spectrum from some operators and redistributing it to others in order to more fairly distribute the benefits that operators get from the refarming. Arguably those proposals heavily contributed to the delays the UK has seen with starting its 4G auction which finally got under way in January 2013.
“As mobile technologies advance and demand for mobile data traffic increases, regulators have acted to liberalize certain spectrum bands from previous technological restrictions. Many regulators have updated the conditions of the licenses to accommodate the principle of technological neutrality, which removes restrictions on spectrum use and allows operators to deploy other technologies in these bands. This is a positive move, a market-based management mechanism that lets the users of radio spectrum decide its real economic value and the best way to use it. Several mobile network operators (MNOs) have taken advantage of this decision to deploy 3G services; this approach can deliver cost savings as fewer base stations are needed, and it also improves 3G coverage. On occasion, refarming has also helped operators to steal a march on the competition by rolling out 4G ahead of their rivals. Ovum’s report provides an overview of how regulators have liberalized these bands and the issues they encountered in doing so.”
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