O2 criticize Ofcom

O2, the UK’s leading provider of mobile phones and broadband severely criticized the regulator for being totally wrong when it gave permission to Everything Everywhere to liberalise its spectrum for 4G. In an unusually blunt attack, O2 demanded Ofcom to convene a fresh Consultation to discuss Everything Everywhere’s plan to launch 4G mobile services in a limited scale by the end of this year, far ahead of other providers. Vodafone, another reputed provider also criticized Ofcom and commented that the regulator has committed ‘three basic errors’.

Everything Everywhere said that the firm was sanctioned permission by the regulator to go ahead with its plan of launching 4G service and it also said that if at all any competitive advantage is there for the firm, it could be matched in the long run. Everything Everywhere added that last year both Vodafone and O2 were having the opportunity to reform their 2G 900 MHz spectrum for LTE but they preferred a 3G service.

In its official response to the regulator’s Consultation also O2 continued its attack on Everything Everywhere’s plans that was published the previous week. The core of O2’s criticism revolves round on the regulator’s contention that the liberalization issue was taken care of when the Orange/T-Mobile merger was sort out by the European Commission. O2 said that this was wrong and it also charged Ofcom for not paying heed to its own research. O2 also said that it had obtained a document as per the Freedom of Information Act wherein Ofcom states that there would be two LTE 1800 players in the market at about the same time and that there won’t be any monopoly. Telefonica did not understand why Ofcom was reluctant to review its own documents on the merger prior to the Consultation.

In its response to Consultation, Vodafone reiterated its opinion that if Ofcom permits Everything Everywhere to re-farm spectrum, it would definitely weaken the competition in future. In its opinion the regulator had not considered the facts in the right perspective before taking the decision for Everything Everywhere has a number of stores, HSPA+ 3Gservice and it has the largest customer base in the UK.

In the Consultation Ofcom stated that even if there is an advantage for Everything Everywhere for launching 4G services ahead of its rivals, the advantage will last only for 15 months. At the same time Vodafone disagreed with this statement saying that the rival companies won’t be able to start 4G services with in 15 months due to various reasons. Vodafone argued that the regulator should not give permission to Everything Everywhere to liberalise its spectrum until the rival providers are in a position to deploy 4G services. It also argued that in terms of network planning and deployment time also Everything Everywhere has a competitive advantage.

Everything Everywhere in its turn said that the firm won’t have an insurmountable lead in 4G because of many reasons like the lack of availability of relevant handsets, non exploitation of the full capabilities of LTE for a number of years etc. It also argued that allowing the firm to introduce the 4G service at a small scale would definitely add to the benefits for the citizens and consumers in the UK. Olaf Swantee, the CEO of Everything Everywhere said that in the UK there are many companies having enough potential to launch 4G services and Everything Everywhere is only one among them and if Everything Everywhere is launching 4G services this year, it doesn’t amount to monopoly. According to him the rival companies are making lame excuses and that would delay the 4G launch in the UK.

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