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Ofcom retreats from 4G spectrum auction after legal threat from Three, O2

Sale halted while Brussels eyes merger plan

Ofcom has halted its 4G spectrum auction, following threats of legal action from Telefónica UK and Hutchison.

The two mobile operators are currently being probed by antitrust officials in Brussels, who are considering whether Telefónica UK's planned sell-off of O2 to Three owner Hutchison "would harm competition".

The firms' willy-waving tactics have successfully mothballed Ofcom's plans to offload a chunk of 4G spectrum before the European Commission has concluded its investigation into the proposed merger between O2 and Three.

However, that decision isn't expected until next Spring at the earliest.

Ofcom said Telefónica UK and Hutchison had recently sent missives threatening to bring judicial review proceedings against the communications regulator's plans to proceed with the 4G spectrum auction.

In late October, Ofcom confirmed plans to sell-off 190MHz of high capacity spectrum – which had been freed up by the Ministry of Defence – with reserve prices set at a total of £70m.

Two bands were made available (2.3GHz and 3.4GHz) to apparently help meet demand for mobile broadband services, according to Ofcom. It had been hoping to begin the auction in early 2016.

Ofcom said:

After careful consideration, given these specific circumstances, we have decided for reasons of good public administration to delay commencing the auction process.

Therefore, Ofcom will not now commence the auction process until the European Commission has taken its decision as to whether the proposed merger between Telefónica UK Limited and Hutchison 3G UK Limited is compatible with the common market.

It's consolidation season in Blighty's mobile market. The country's competition watchdog recently tentatively waved through BT's planned takeover of EE. A final decision from the Competition and Markets Authority about that particular merger won't be made until January next year, however. ®

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