In a move that means we may get lightning fast internet on our phones much sooner than expected, Ofcom has decided that Everything Everywhere can effectively maintain its monopoly because the ‘significant benefits’ to consumers far outweighed concerns about lack of competition. Naturally, the two largest operators are rather chuffed, but the deal does rather fly in the face of previous rhetoric about how the new part of the spectrum would be doled out.
Originally, there had been talk of a portion of the network being kept aside for a fourth network (namely Three), but since the vast majority of the bandwidth went to Everything Everywhere, it has been up to the latter to decide its fate. EE has sold its excess spectrum to Three, but under the condition that the it will not be released until September 2013.
The only reason it is having to flog the spectrum is because the European Commission told it to when Orange and T-Mobile merged, but waiting until the last possible moment to offload it means monopoly on the new 4G is maintained. Vodafone and O2 will no doubt be sorely disappointed at the decision to hand the spectrum to EE, as it will give the incumbent a year-long head start in the new ultra-fast mobile market.
It’s an odd decision from Ofcom. The body that is supposed to stimulate competition has decided that just because the largest company is equipped to do the job faster, that it should be allowed the monopoly. There will now doubt be short-term benefit to the consumer (whose interests Ofcom is supposed to protect), but in the long term, there is likely to be very little choice of provider. EE will be well established, mature, and the first 20 million 4G users will already be signed up to it by the time anyone else can get in on the action.
On the other hand, there's nothing like having an incumbent to focus on, to sharpen up the compeitition when it does along. So, perhaps we can all look forward to 4G being rolled out sooner than expected, but expect a pretty price to go with it…