Controversy Over Ofcom's Plan For Spectrum

Vodafone (NYSE: VOD) and O2 have attacked Ofcom’s plan to auction off spectrum for 3G services, because it involves taking some of their 900 MHz spectrum and letting the other telcos bid on it. The 900 Mhz spectrum is better for mobile services than other mobile spectrum in the UK because the signals travel further, and Vodafone and O2 were given the spectrum in the 1980’s to launch GSM services, reports The Guardian, with 3G services restricted to higher spectrums. The EU has since ruled that Ofcom must “liberalise” the spectrums and remove the restrictions on them, and as part of that Ofcom has decided to reallocated the spectrum to make it fairer for all the mobile companies. Naturally, the companies losing the good spectrum are against the proposal, while the other telcos are for it. In summary:
–“Ofcom believes that reclaiming part of the old 2G (second-generation) spectrum and re-auctioning it to rivals Orange, T-Mobile and 3 will lead to cheaper services, better indoors mobile coverage, fast wireless broadband in rural areas, 10,000 fewer masts across the country, and £6bn (US$11.8 billion) worth of benefits to the economy.”
–“O2 estimates that implementing Ofcom’s plan, outlined last September, will cost both companies a total of £13bn (US$25.5 billion) – most of which will be passed on to consumers as higher bills and less competitive services, it says – and require 7,000 new mobile phone masts across the country.”

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