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Three to lawyer up unless Ofcom intervenes in spectrum market

If we can't buy O2, they must give us MOAR SPECTRUM

Three has renewed calls on Ofcom to intervene in the UK's mobile spectrum market, warning it could lawyer up unless the regulator curbs the proportion of airwaves owned by Vodafone and BT's EE in the forthcoming auction.

Dave Dyson, chief executive of Three UK, said: "The UK has the most imbalanced spectrum distribution of the top 50 countries in the world other than Thailand and Malaysia.

"Only four operators across all of Western Europe have less than 15 per cent of usable spectrum in their markets. Two of those operators are in the UK."

BT and its EE network own 45 per cent of the country's usable spectrum between them, compared with 28 per cent for Vodafone, 15 per cent for O2 and 12 per cent for Three.

Ofcom's draft proposal for the forthcoming spectrum auction would allow BT to amass nearly 50 per cent of the available spectrum, said Dyson. "That in itself would be a worrying outcome, but add to that there is no way to reconnect that balance for years."

He said in an earnings call: "One or two operators will dictate the pace... We strongly believe intervention needed to mitigate risks.

"If Ofcom doesn't change its view, we're pretty much left with no option to figure out how do we create the right outcome. And that possibly leads us down a path where we would legally challenge the decision."

According to its recent results, Three UK's mobile users are ripping through well over 6GB of data a month.

Dyson said: "If Three had access to that unused national asset, we estimate our download speed would be three times faster than it is today. After a decade of prices going down, we are starting to see price increases."

Three's owner CK Hutchison had hoped to acquire Telefonica's O2, until that was squashed by European regulators.

"Obviously that deal didn't go ahead, but the fundamental reasons why we did that are still in place. We need scale to be an efficient and effective competitor within the market and we need more spectrum to accommodate the data growth," said Dyson.

The company recently announced plans to acquire UK Broadband, which it said would help on the spectrum side. "The portfolio of spectrum is valuable... although it is not immediately usable for mobile," said Dyson.

He said the acquisition will help the operator enter the home broadband market as a wireless provider. ®

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