Our official response to Ofcom’s announcement regarding Everything Everywhere and 4G services.

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This morning industry regulator Ofcom announced its approval of an application by Everything Everywhere (EE) to use its existing 1800 MHz spectrum to deliver 4G services. While this is not entirely unexpected, it is disappointing and we believe that Ofcom has failed to take into account the full impact of this decision on the wider economy.

Until an auction is held to release the appropriate spectrum to all bidding operators, Ofcom isn’t creating a level playing field for the delivery of 4G services in the UK and we are pressing for this process to begin as soon as possible.

However, when we do have the spectrum we need, our experience in launching 4G in several markets around the world including Germany and USA has taught us a number of vital lessons which mean we are well placed to launch a 4G network quickly and effectively.

We are also confident that our planned network partnership with O2 – announced in June – will give Vodafone customers access to a nationwide grid of sites delivering an indoor service on 2G, 3G and 4G to 98% of the UK population in 2015. That is two years earlier than Ofcom’s own chosen deadline of 98% 4G coverage by 2017.

Our official statement is as follows:

“We are frankly shocked that Ofcom has reached this decision. The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.

“Ofcom’s timing is particularly bizarre given the reports that Everything Everywhere is currently in discussions to sell some of its spectrum to 3, which Ofcom has previously been at such pains to protect with its over-engineering of the 4G auction. This means the balance in the auction will fundamentally change.

“The regulator has spent several years refusing to carry out a fair and open auction. Now its decision today has granted the two most vociferous complainants during that entire process a massive incentive to further delay it.

“We wholeheartedly support the Secretary of State’s call for the 4G auction to occur in December and look to the regulator to finally do its job and produce a competitive market for 4G services as soon as possible.

“We firmly believe that a fully competitive market for 4G services is in the best interests of Britain. We have already committed ourselves to reach 98% of the UK population with indoor 4G services by 2015 – two years before Ofcom’s own target – but we need to acquire spectrum in the auction to achieve this. Ironically, all that stands in our way right now is the regulator.”

This morning’s Ofcom statement read:

“Ofcom has today approved an application by the mobile phone operator Everything Everywhere (EE) to use its existing 1800 MHz spectrum to deliver 4G services.

“Following a consultation, Ofcom has concluded that varying EE’s 1800 MHz licences now will deliver significant benefits to consumers, and that there is no material risk that those benefits will be outweighed by a distortion of competition. Delaying doing so would therefore be to the detriment of consumers.

“The decision takes account of the forthcoming release of additional spectrum in the 800 MHz and 2.6 GHz bands, in an auction process set to begin later this year, which will enable other operators to launch competing 4G services from next year.

“In parallel with this decision, Ofcom has now issued varied licences to EE which authorise LTE services from 11 September 2012. This means that EE can launch LTE services using its 1800 MHz spectrum at any point from that date, although the precise timing of any launch is a commercial decision for Everything Everywhere.”