US-based satellite company ViaSat said it will launch legal action against UK regulator Ofcom over a licence issued to its rival Inmarsat in 2009 for mobile services.
The legal action, which ViaSat said it would launch “imminently”, is the latest facing the UK regulator after operators EE and 3 UK said they would challenge a proposed mobile spectrum auction in the country scheduled for December.
According to Financial Times (FT), ViaSat argues Inmarsat abused the conditions of the licence by earmarking the spectrum for an in-flight broadband network instead of the satellite-based mobile network the licence was originally intended for.
Inmarsat did not proceed with building the mobile network and instead allegedly used the spectrum for the airline broadband service it is currently readying for launch in 2018.
However, the plans could be derailed by its rival after ViaSat told Ofcom the “blatant misuse of spectrum must stop now”.
In-flight broadband proved a recent growth driver for the satellite industry.
Projections by banking giant HSBC indicate the in-flight broadband market will grow to $5 billion in 2025, up from $700 million in 2015.
In its report, FT said Ofcom declined to comment on the ViaSat situation. However, the regulator met with the US company to discuss the issue in recent months, and also held a consultation to change the terms of the licence in 2016.
ViaSat took the issue to the European Court of Justice, as well as filing objections with German and Italian regulators.
Rick Baldridge, ViaSat president and COO, told FT Inmarsat must comply with the conditions it originally agreed to.
“We are investing billions of dollars and to have people avert those rules is inappropriate,” he said: “Are there rules or are there no rules? Can we use our Ka-band licence for 5G? The telco guys would say no and rightly so.”
Inmarsat, which signed up a number of airlines to its service, hit back in an emailed statement to Mobile World Live.
SVP of Inmarsat Aviation Frederik van Essen pointed out that ViaSat had made representations of its argument to both the European Commission and Ofcom in the past but failed.
He believes that resorting to legal action was another attempt to delay Inmarsat’s plans.
“We consider ViaSat’s claims to be entirely without merit and fundamentally misconceived,” he said. “Their strategy has had no impact on our preparations and we remain on course to commence commercial services with our launch customer in the first half of 2018.”
He also said the company was ready to intervene and support Ofcom or any other regulator, if necessary.