EE threatens legal action over mobile airwaves restriction

BT’s mobile network EE is planning legal action against the UK telecoms regulator over its decision to restrict the amount of mobile airwaves any one company can own.

EE will on Monday threaten Ofcom with a High Court challenge if it does not reverse its decision, announced last month, to stop mobile phone companies from owning more than 37 per cent of usable spectrum by 2020.

Rival company Three has already announced action against Ofcom, which could be forced to further delay an auction of mobile spectrum that was due to take place in September and October.

Three, which is owned by Hong Kong conglomerate CK Hutchinson, is the smallest of the UK’s main mobile operators and had lobbied for a tougher 30 per cent cap on spectrum ownership to limit BT’s and Vodafone’s participation in the auction.

Three owns 15 per cent of available spectrum and has argued that UK airwave ownership is anti-competitive and that small operators struggle with overloaded networks. EE owns 43 per cent of available spectrum, while Vodafone owns 30 per cent.

EE says it does not dominate the market for all services. It has accepted Ofcom’s cap for 4G, it said, but believes it should be allowed to participate freely in the auction for the most up-to-date 5G spectrum.

“In response to Three’s action, we have made the difficult decision to challenge the proposed structure of the next auction of mobile spectrum,” the company said. “We need to protect our customers’ mobile experience, and help build the platform for the UK to have the highest-quality 5G networks.”

EE’s challenge raises the prospect of a significant delay to the rollout of faster 5G services, which has already been held up by Three’s attempted acquisition of O2, another operator, which is owned by Telefónica.

“Legal action will inevitably cause delay to the auction and gives no thought to the impact and harm this will have to UK customers, companies and economic growth,” said Mark Evans, chief executive of O2, in response to news of EE’s planned challenge. “This country desperately needs more mobile airwaves.”

The UK is no stranger to legal disputes over spectrum sales. The country was the last leading market to launch 4G technology after a similar auction was delayed for years by legal wrangling between competitors.

Dave Dyson, chief executive of Three, said in March that it would have “no option” but to mount a legal challenge if Ofcom did not respond to its call for a 30 per cent cap on ownership.

Ofcom, however, said the 37 per cent limit was appropriate given Three acquired the owner of the Relish fixed-wireless broadband provider in February, substantially boosting its own spectrum holdings. It also concluded in its findings that Three had been “overly pessimistic” in its market view.

In response to the latest legal threat from EE, Ofcom said: “Consumers are using more mobile data every year. Any delays in releasing new airwaves risk harming people and businesses.”

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