Everything Everywhere will not be guaranteed sub-1GHz spectrum when the much-hyped and twice-delayed 4G auction takes place later this year, Ofcom confirmed today.
Ofcom originally planned to hand Everything Everywhere a "small amount" of guaranteed 800MHz spectrum "for it to be a credible national wholesaler in the future."
However, following a consultation in March 2011, Ofcom has concluded Everything Everywhere would not need the extra 800MHz to provide quality 4G services.
This is a crucial step in preparing for the most significant spectrum release in the UK for many years.
"We now consider it appropriate to place more emphasis on evaluating the capabilities of a national wholesaler's spectrum holdings in the round," Ofcom said in its report.
"In doing so we take greater account of the large amount of 1800MHz spectrum that Everything Everywhere holds, which is in our view likely to enable it to have a sufficient quality of coverage and capacity, as well as providing it with a large bandwidth of spectrum suitable for LTE and the possibility to offer highest peak speed in both the near and longer term."
The telecoms regulator argued Everything Everywhere's large quantity of 1800 MHz spectrum meant it was likely there would only be "a fairly small gap between what Everything Everywhere and the holders of 800MHz spectrum could deliver."
"We do not consider that the evidence available to us demonstrates that the differences between an 800MHz and an 1800MHz network would be sufficiently important for Everything Everywhere not to be capable of being a credible national wholesaler without sub-1GHz spectrum."
One provider will be guaranteed 800MHz spectrum, but Everything Everywhere, O2 and Vodafone will not be legible. Instead, it looks likely Hutchison 3G UK-owned operator 3 will be certain to get a sub-1Ghz allowance.
"We consider that there is a material risk that there will be fewer than four credible national wholesalers of mobile services in future if neither Hutchison 3G UK (H3G) nor a new entrant were to acquire at least a minimum amount of spectrum in the auction," Ofcom added.
"Bidders for the reserved spectrum will have to compete with each other, but provided that there is at least one bidder (other than Everything Everywhere, Telefonica or Vodafone) that is willing to pay the reserve price for this spectrum, one such bidder is guaranteed to win it."
Ofcom told IT Pro it expects to make an announcement on how 900MHz 1800MHz could be used for LTE connectivity.
Everything Everywhere, which is due to sell off some of its current spectrum due to Orange and T-Mobile merger conditions, hasn't taken the news well.
"Everything Everywhere is very disappointed to see that Ofcom has again reversed its proposal to ensure all mobile operators hold a minimum amount of sub 1GHz spectrum," a spokesperson said.
"Ofcom is missing a huge opportunity for the UK to address the imbalance in sub 1GHz spectrum holdings, which has damaged consumer interests for the last 20 years - and is a situation which is now threatening to continue.
