UK 4G spectrum auction farce latest: 3 Mobile gives capacity warning

In a press conference in London yesterday, Three Mobile said it could realistically run out of capacity on its network by the end of next year if the 4G spectrum auction is not sorted out sooner rather than later.

If this is the case generally, the chaos ensuing for the Olympics next year – when demand for 3G services is expected to be unusually high – can only be guessed at. In short, it could be a complete disaster.

However, it is a problem felt by 3 Mobile more than its rivals. A late entrant into the UK mobile broadband market, Three lacks the 2G capacity of rivals such as Vodafone and O2. They are now being allowed to use this old spectrum to lighten their 3G load which, says Three, is making for an uneven playing field – an issue that should be addressed with the 4G auction.

Three’s chief executive David Dyson said: "There is a huge financial incentive for rival operators to delay the auction. We are worried that the other three [including Everything Everywhere, the joint network of Three and T-Mobile] will attempt to squeeze us out of the market."

The problems are stemming from disagreements over how the auction will take place. Ofcom has proposed a cap on the amount of spectrum each company can bid for, which will ensure Three stays in the hunt against its rivals. Unsurprisingly its rivals aren’t happy with this, even though they clearly currently have an unfair advantage: so the stalling tactics go on with legal challenges to the auction process.

Broadband Genie editor Chris Marling said: "Of course, alongside 3 Mobile, the biggest losers are UK businesses and consumers who look likely to continue to have a fourth rate mobile broadband network, rather than a 4G one. The technology is there – the only thing stopping us taking advantage of it is petty boardroom squabbling."