Telefonica, the parent company of O2 in Britain, has told the UK regulator that it is minded to challenge in court Ofcom's decision to grant preference to the Orange/T-Mobile joint venture 'Everything Everywhere' (EE), in the race to be the first to deploy LTE. By Martyn Warwick
If O2 goes ahead with its threat EE's much-trumpeted plans to have what it calls "4G" available before Christmas (even if it is only via dongles rather than real LTE handsets) will be pushed into 2013 and a good deal of competitive advantage will be lost to it.
Last week, in a surprise move that shocked and angered the UK's other major mobile players, Ofcom gave EE permission to launch limited "4G" services from as early as September 11 - thus giving the joint venture a year's advantage and a massive commercial head start on its rivals.
Both O2 and Vodafone contend that the regulator has put them at a serious disadvantage by handing 4G on a plate to EE whilst requiring them to have to wait until the long-anticipated (and even longer-delayed) 4G spectrum auction finally takes place.
And it should be remembered that no matter how soon the auction is sanctioned, the bandwidth to be released is currently being used to carry television signals and although its transfer to telecoms network application in some areas of the UK will be fairly swift, in other parts of the country it will be slow. It is thought that a nationwide LTE service cannot be introduced before late next year- at the earliest. The transfer might even drag on into 2014.
Having sat back and ruminated on Ofcom's peculiar decision for a week or so, O2 has decided that it intends to appeal the regulator's decision at the Competition Appleals Tribunal.
The operator's decision has also been communicated to the british government via the office of the culture secretary, Jeremy Hunt.
No doubt the lines of communication between the government, the regulator and O2 are aready humming and no doubt subtle and no so subtle political pressure is being brought to bear. However, if O2 holds its nerve and proceeds with an appeal, EE's chances of launching its 4G services will be booted into the long grass for several months whilst the law takes its measured course.
Word has it that 02 finally decided to reach for its lawyers after Everything Everywhere missed this Tuesday's deadline to delay the introduction of 4G until 2013.
None of the interested parties have made any sort of substantive comment but last week, Olaf Swantee, the chief executive of Everything Everywhere, getting his retaliation in early, made a fairly explicit threat when he said, "I will commit here and now to support the [4G] auction process, even though there are aspects of the auction rules that we don't like. However, and I am hoping it doesn't come to this, if there is litigation against Ofcom's ruling, we will have no choice but to review our position".
Ofcom will want to settle this matter out of court and well away from the limelight having recently been criticised for poor decision-making in regard to the regulation of TV in the UK, but o2 (ad,n potentially, others) will want this played out in full public view
Meanwhile, EE finds itself committed to an series expensive advertising campaigns in the press, on radio and television that were slated for early October.
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