Three UK has asked the telecoms regulator Ofcom to limit the amount of spectrum that BT and EE, the recently merged company, can buy in the next bid for spectrum, which is expected at the end of the year.
Having been thwarted by the EU in its attempt earlier this year to acquire rival operator O2 for £10.25 billion, Three has expressed concerns about BT’s financial ability to acquire more spectrum, which could threaten Three’s ability to remain a viable operator, and hence limit market competition.
Speaking to Financial Times, Three’s CEO, David Dyson said: “The combination of BT and EE is incredibly strong financially. It has got the financial ability to outcompete everyone in the market in how much they are willing to pay. Potentially, given how much spectrum they are already sitting on, BT is incentivised to strategically bid in the next auction to restrict the other operators in the market from increasing their spectrum portfolio… That could make life difficult.”
Dyson noted that following the EU’s decision to block its acquisition of O2, the company was in a more precarious position in light of BT and EE’s combined financial muscle, and that the merged company now owned “close to half” of all spectrum used by UK operators.
The spectrum in question in the 2.3 GHz, 3.4 GHz, and 700 MHz bands, which is significant as it is ideal for mobile broadband 4G services. As a result, Three has asked Ofcom to apply “competitive restraints to stop the imbalance getting worse”.
When reviewing the EU’s decision to block Three’s purchase of O2, back in May, Ofcom said: “Three and O2 are important and effective competitors in the UK, helping to deliver innovation, investment and competitive prices over many years. Competition must be sustainable, and regulation should support it. We will aim to do so through tools such as market reviews or auctions of mobile airwaves.”