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Decision to vary Everything Everywhere’s 1800 MHz spectrum licences to allow use of LTE and WiMax technologies

Statement published 21|08|12

Summary

1.1 This document sets out our decision to vary Everything Everywhere's (EE) 1800 MHz Wireless Telegraphy Act 2006 licences to allow the use of LTE and WiMAX technologies.

1.2 On 23 November 2011 we received an application from EE for variation of its 1800 MHz licences to enable it to provide services using LTE technology in those frequencies. The application encompasses all frequencies currently licensed to EE in the 1800MHz band, i.e. the 2x15 MHz that it undertook to divest as a result of its merger in 2010 and the 2x45 MHz it will retain.

1.3 In light of this application, on 13 March 2012 we published a notice (the March 2012 consultation) setting out our intention, subject to consultation with any interested parties, to vary EE's licences as requested.

1.4 In the March 2012 consultation, we explained that: (i) in light of consumer demand for mobile data services, the availability of new high-speed mobile data services is likely to bring material benefits to consumers and citizens; (ii) if we were to vary EE's licences, EE would be likely to be the only entity capable of providing LTE/WiMAX services on a national basis for a period of time; (iii) we had therefore considered whether there was a risk of distortion to competition if we varied EE's licences; and (iv) our view, subject to consultation, was that no material risk to distortion of competition would arise as a result of such variation.

1.5 We received 16 responses to the March 2012 consultation, including a number of significant responses from other mobile operators. Having considered the responses to our consultation, we also sought certain further information from some stakeholders.

1.6 In light of the available evidence and in order to best meet our relevant regulatory objectives and statutory duties, we have considered the extent to which liberalising EE's 1800MHz licences now would:

  • be to the benefit of consumers because it would further their interests by, for example, encouraging innovation, investment, and the availability and use of high speed data transfer services throughout the UK; and improve choice, price, quality of service and value for money; and/or
  • give rise to a material risk of a distortion of competition to the detriment of consumers such that any benefits to consumers resulting from liberalisation of EE's 1800 MHz licences now would be outweighed by the detriment to consumers resulting from such a distortion of competition.

1.7 Varying EE's licences would allow EE to provide better quality data services to consumers, for example with higher speeds and lower latency, than can be offered by operators using 3G technologies and existing spectrum holdings. Accordingly, we expect that consumers that choose to take EE's LTE service will derive benefits that they would not otherwise enjoy were we not to vary EE's licences now.

1.8 Although we consider it likely that EE will enjoy a competitive advantage during the period before other operators are able to launch their own LTE services, we consider on the evidence available that any such advantage is unlikely to result in an enduring advantage which distorts competition to the detriment of consumers. Our assessment takes account of the impending release of additional spectrum in the 800 MHz and 2.6 GHz bands which will enable other operators to launch competing LTE services during the course of 2013. We have also taken into account EE's obligation to divest itself of some its 1800 MHz spectrum.

1.9 In light of this assessment, and for the reasons explained in more detail in this decision, we consider that it is in the interests of consumers for us to vary EE's licences now, in accordance with EE's request. We have therefore today issued EE with varied 1800 MHz licences with the provisions authorising LTE and WiMAX coming into force on 11 September 2012.

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