O2 UK lost out in a ruling by the country’s Competition Appeal Tribunal (CAT) about whether it has the automatic right to re-use its 900MHz 2G spectrum to provide 3G services. The company, supported by peer Vodafone UK, had asked for permission to re-use the  frequencies in line with several European Commission directives, which have called for Europe-wide harmonisation of spectrum use across markets, including support for the use of 2G frequencies for 3G services, by May 2010. O2’s request was opposed by Ofcom, which was supported by 3 UK and Everything Everywhere – these operators do not have a 900MHz allocation which could be used for 3G.

The issue centres on the definition of making spectrum “available” for 3G services. The CAT argues that this does not mean that O2 has an “inviolable” right to use the frequencies, which were licensed specifically for GSM services, without a competitive market analysis having been conducted first. It argues that the re-use of the 900MHz spectrum is more than O2 “simply seeking to remove some technical restrictions,” as the changes could significantly impact the competitive market in the UK. The ruling was also somewhat damning of telecoms watchdog Ofcom, stating that “while [the Department of Business, Innovation and Skills] request to do nothing may have put Ofcom in a difficult position, we find aspects of its conduct unattractive”, and that its responses to O2 to have been “surprising.” Moving forward, CAT notes that “It would be a tragedy if yet further legal wrangles caused more delay in opening up the 900/1800 MHz bands in the UK to UMTS technology.”