Having failed to merge with UK rival Telefonica O2, 3 UK attacked market leader BT/EE with a call for regulatory intervention.
David Dyson, chief executive of 3 UK, called for a cap on the amount of spectrum any one operator can hold in the country’s mobile market.
Speaking to BBC News, Dyson said a single operator should be limited to 30 per cent of the UK’s total spectrum. Currently, BT/EE holds 42 per cent, followed by Vodafone UK on 29 per cent, 3 UK on 15 per cent and Telefonica with 14 per cent, he said.
The small players’ lack of scale makes it harder for them to compete on a level playing field with their larger rivals, he argued.
Dyson’s comments come ahead of Ofcom publishing a consultation on the rules for a spectrum auction in the 2.3 GHz and 3.4 GHz bands. Publication is due in the next few weeks.
The auction was scheduled to take place earlier this year but Ofcom decided to delay because of negotiations between 3 UK’s parent, CK Hutchison, and Telefonica about merging their UK units.
Those talks failed in the light of opposition from the European Commission, concerned about consolidation in the UK market leading to less competition. If the deal had succeeded then 3 UK/O2 would have had a spectrum pot equal to its rivals (according to 3 UK’s own figures).
Dyson commented that Hutch is not looking at any fresh merger or acquisition opportunities at the moment.
If Ofcom did adopt Dyson’s proposal, then both BT and Vodafone would be severely limited in how they could participate in the auction.
Both BT and Vodafone bridled at Dyson’s suggestion of a spectrum cap. Sources at the former pointed out 3 UK could have bid in the last UK spectrum auction but chose not to. In addition, the UK competition authorities had assessed spectrum holdings as part of their scrutiny of BT’s purchase of EE, and found nothing amiss.
Likewise, Vodafone described Dyson’s comments as “pretty surprising” and that 3 UK had “ample opportunity” to bid for radio frequencies in the past, according to Bloomberg.