T-Mobile and Orange won't be handing over any radio spectrum when they merge, despite the fact that T-Orange will own almost half the available airways.
The combined force will have licences to operate in 170MHz of radio spectrum, compared to Vodafone's holding of 76MHz and Orange's 66MHz, but the operating officers of both companies have told a conference that they see no reason why they should give up any of that holding to appease Ofcom, the UK's regulator.
At the FT's World Telecoms Conference the COO of T-Mobile's owner Deutsche Telekom said that the merged company would not, to his understanding, relinquish spectrum, a view that was backed up by France Telecom's head of mobile operations - speaking for Orange.
Until now there has been an assumption that T-Orange would give up some spectrum: poor starved 3 only has 15MHz of bandwidth to play with so could really do with some 1800MHz, where most of the T-Orange holding is. Right now only 2G GSM technology can be deployed in those bands, but that's going to change soon.
The other operators won't be happy to be competing with a company that has 37 per cent of the customer base, but more than half of the radio spectrum. The Independent Spectrum Broker's last report on the subject suggested capping any company's spectrum holdings at 120MHz, but that was before T-Orange had been announced.
It's easy to imagine nothing happening prior to the merger, and then Ofcom (greatly slimmed down by a Conservative government) negotiating an agreement by which Vodafone and O2 get to keep their 900MHz allocations in exchange for not making a fuss about T-Orange's holdings. And you can see 3 left shouting from the sidelines and increasingly dependent on the network-sharing agreement that was set up with T-Mobile before things got quite so strange. ®