Ben's Talk3G Blog

The last big mobile technology change in recent history (2003, just 9 years ago almost to the day) was a relatively simple one. One primary band, 2100MHz, was auctioned off by the government. A whopping five mobile operators were awarded spectrum, and then had to deploy WCDMA technology in it. The same thing miraculously happened across much of the world, especially Europe, and '3G' handsets worked within this band pretty much without exception.

Since then the rapidly changing pace of technology has started to fragment the playing field. About a year ago, UK mobile operators started putting 3G services in the 900MHz band previously used exclusively for GSM services. This has the advantage of getting 3G out to more rural areas, as lower frequencies travel further. Now things are being taken a step further as it looks like Everything Everywhere will deploy an entirely new technology, LTE, the successor to WCDMA, in their 1800MHz spectrum without even waiting for new auctions to take place.

There are strong arguments in play that suggest that allowing the mobile operators to get out of kilter with one another in this way will distort competition. Their offerings will not be coming from a level playing field, because each operator has subtly different spectrum allocations at present that result in various advantages and disadvantages. EE, using 1800MHz, are going to be able to provide much higher urban capacity for LTE than, say, Vodafone using 900MHz, which is far more suited to covering larger areas and building penetration. Three, the UK's smallest and newest operator, have only 2100MHz spectrum, so they don't appear to have the option of taking any further steps at present regardless of the liberalisation of spectrum being allowed by the regulator, Ofcom.

Of course, rolling out LTE now in existing spectrum isn't as clear a 'win' as you might imagine. The EU-wide bands expected to be used for LTE are 800, 1800, and 2600 MHz. Vodafone and O2 have mostly 900MHz and 2100MHz spectrum, neither of which make much sense for LTE because in reality very, very few devices will ever support them. The new spectrum to be auctioned at 800MHz should be great for bringing high speed mobile coverage to sparsely populated areas, and at 2600MHz should give great capacity in urban areas. That EE can and likely will push ahead with a deployment at 1800MHz does appear to give it an advantage over its rivals, as not only is it in somewhat of a 'sweet spot' frequency-wise, but it'll also be supported by many devices and be similarly utilised by networks across Europe and beyond.

A twist: When EE formed from the controversial (but perhaps not controversial enough) amalgamation of Orange and T-Mobile, it was forced to sell some 1800MHz to prevent the combined network from having too great a share of such a valuable and scarce resource. The sale needs to take place by the end of this year. This means that EE won't be the only network with 1800MHz spectrum usable for LTE this year. Just who will buy it, and what they'll do with it, is a very interesting prospect indeed.

Ultimately the playing field will be vastly levelled once the '4G' spectrum auction takes place at the end of this year (or possibly the start of next year). One thing's for sure, if EE do deploy LTE this year, possibly followed by another operator after winning some usable 1800MHz spectrum, the 4G auction will be demanded by the competition, not delayed as has been the case thus far. In the meantime, given the lack of availability of LTE devices, O2 and Vodafone should concentrate on their offerings at 2100MHz and 900MHz - where improvements now will have a very real impact for years to come. Only Three is left a little on the sidelines at this stage, but its own push into ensuring its HSPA network is utilising the latest, fastest standards, its innovative tariff structure, and its modern, efficient network should easily keep it competitive for the next 12-18 months.

On a final note. It's worth remembering that the UK is now massively behind. Where it has been a leader in mobile technology since its inception, it now languishes while major competitors like Germany have full-scale commercial LTE deployments. The USA, previously a piñata for ridicule due to its stale and expensive mobile services, has now raced ahead, not only with some of the most advanced mobile networks in the world, but also with the most advanced mobile devices courtesy of Apple and the iPhone. The UK needs to move forward, and as strong as the argument for distorted competition is, I think there's an equally strong one for throwing caution to the wind in the run-up to the 4G auction and letting the mobile operators run wild with their existing assets.