Telefonica’s UK unit has mounted a legal challenge against Ofcom’s block allocation that could delay the bidding by 18 months.
O2 UK issued a letter of claim by last week’s deadline meaning it intends to challenge the regulator about concerns that have not been resolved to its liking during previous consultations.
O2 wants Ofcom to auction contiguous blocks of spectrum, instead of fragmented slices, in the auction scheduled for later this year for an 80MHz block in the 700MHz band and 120MHz in the 3.6-3.8GHz band.
Disagreements with the regulator about the premise for spectrum auctions are not new and were largely responsible for the UK being a laggard in 4G deployment.
Ofcom has already been obliged to adapt its approach to the upcoming auction. It dropped proposed spectrum caps and coverage obligations as part of the £1 billion Shared Rural Network deal, agreed between the operators and the government, to extend the geographic coverage of 4G to 95% of the UK’s territory by the end of 2025.
Now O2 wants Ofcom to harmonise how it ‘packages’ the spectrum, offering contiguous blocks instead of fragmented slices because 5G functions more efficiently with access to large blocks of 100MHz or more contiguous frequency.
Currently, only Three UK has that advantage due to a concession made by Ofcom in December 2018, which was opposed by the other operators.
Ofcom’s plan is to make this an option for the others through the mechanism of a secondary so-called assignment stage: in the final round of bidding, operators can negotiate between themselves exactly which frequencies in the 3.6-3.8GHz range the highest bidders have won
O2 feels this adds unacceptable complexity and uncertainty.
An Ofcom spokesperson reportedly commented, “People and businesses need fast, reliable mobile services more than ever, so we want to auction these airwaves as soon as possible.
We’re really disappointed that one operator has threatened to launch a legal dispute that could slow things down for mobile users and the economy.”
O2 has declined to comment.
Earlier this week, Telefonica confirmed it is in talks with Liberty Global, regarding the possible merger of O2 UK and Virgin Media.