Everything Everywhere's 4G network bid: a storm in a teacup?
Can Everything Everywhere provide the solution to Britain's 4G deficit without damaging competition?
The importance of bringing 4G to Britain must not be underestimated. The UK has committed to having the best superfast broadband in Europe by 2015, and mobile will have an important role to play in achieving that aim.
Moreover, recent research by Capital Economics (sponsored by Everything Everywhere) claims that the introduction of 4G mobile networks has the potential to add 0.5 percent to GDP by the end of the decade – equivalent to £75 billion.
According to Ovum analyst Matthew Howett, the earliest route to 4G would be through Everything Everywhere's 1800MHz spectrum, and Ofcom is right to consider this option. However Ofcom must also consider how to safeguard competition.
Howett proposes two solutions. The first is to give permission for Everything Everywhere to deploy 4G at 1800MHz, with the caveat that other interested operators can rent parts of its spectrum to deliver their own 4G services – similar to the obligation that BT is under to share access to its fibre optic infrastructure. However, Howett said that this would not be a quick or easy option.
The other concerns the conditions imposed on Everything Everywhere as part of the regulatory approval for the merger of Orange and T-Mobile in 2010, which state that the company must sell a quarter of its spectrum holding in the 1800MHz band.
Howett said that whoever acquires the 1800MHz spectrum could launch a rival 4G network. However, Ofcom would have to restrain Everything Everywhere from deploying 4G at 1800MHz until it has completed the sale of this spectrum.
“Clearly neither of these two options are ideal, which makes the joint award of new spectrum at 800MHz and 2.6GHz later this year that much more important,” he said in a blog post.
'No threat of nationwide coverage'
In spite of the brouhaha, Alan Hadden, president of the Global mobile Suppliers Association (GSA), reckons it's a storm in a teacup. Even if Ofcom does give the go ahead for Everything Everywhere's to launch its 4G network, it is unlikely to cause serious market disruption, he said.
“This is not really what I would call a threat of nationwide coverage,” said Hadden “The operators that we're talking about are already in the business of GSM and mobile broadband, so LTE is really an additional investment, and that investment may be limited to the cities or expanding rural areas.”
He said that 1800MHz is a prime band for LTE, and is already being used in countries such as Angola, Singapore, Sweden, Australia, Korea and Saudi Arabia to deliver 4G services. There is also an ecosystem of user devices – including smartphones, tablets, routers, dongles and personal hotspots – that can pick up 4G signals at 1800MHz.
Hadden added that the trend in Europe is for operators to run LTE in three bands – 2.6GHz (for high capacity), 800MHz (freed up from the switch off of analogue TV) and refarmed 1800MHz. Swedish operator TeliaSonera, for example, requires all of the new devices coming onto its network for LTE to run triple band.
“The point is that what Everything Everywhere is requesting is not unusual,” he said. “It is part of the mainstream direction in Europe and Asia and in other markets.”
4G: a mobile revolution?
The current lack of 800MHz and 2.6GHz spectrum in the UK has not stopped operators finding other ways to test 4G technology.
In March, UK Broadband switched on a wholesale 4G network in London, using spectrum in the 3.5GHz band. The network has been built using Time Division Long Term Evolution (TD-LTE) – a variant of LTE developed by China Mobile to meet the growing demand for data capacity.
UK Broadband's 4G network will not deliver commercial services, but is intended to provide a solid platform for other operators to drop onto when capacity on their own networks becomes constrained, the company said.