UK 3G Operators to be Let Off the Hook?

November 24, 2004 - source: BWCS

UK telecoms regulator, Ofcom, is set to relax licence regulations governing the speed at which operators must deploy 3G networks across Britain. The move is expected as part of a wide-ranging reform of the highly-regulated market for radio frequencies in the UK.

On Tuesday, the regulator said it was prepared to address concerns raised by the winners of Britain's five 3G licences in a consultation document due to be published in three weeks time. The document will form part of Ofcom's expected shake-up of the UK's arcane radio-frequency rules, some of which date back to the early part of last century.

MmO2, Orange, 3, Vodafone and T-Mobile, which between them paid a total of £22.5 billion for next generation mobile phone franchises in 2000, would like Ofcom to relax their licence commitments to provide 3G network coverage for 80% of the UK population by 2007. At the same time, the regulator may also relax rules on how spectrum is bought and sold in the UK. Ofcom says it will do so in a bid to encourage competition and innovation.

The regulator has already gone as far as saying that intends to allow the buying and selling of blocks of frequencies in most of the available spectrum areas by 2010. The mobile industry has until February of next year to respond to its suggestions.

Ofcom says it hopes to allow the market to decide the best use for new spectrum allocations. In turn it hopes that this will give licence holders the confidence to plan for the future. It also hopes that by increasing the amount of licence-exempt spectrum, it will encourage businesses to develop new, low-cost technologies and services. By 2010, the regulator believes that 7% of the available radio frequencies in the UK will be licence exempt.