UK operators slammed regulator Ofcom for a spectrum cap set to be imposed ahead of forthcoming 4G and 5G auctions, which O2 UK and 3 UK say falls short, and EE believes is unnecessary.

Ofcom’s latest announcement fleshed out rules for its upcoming auctions revealed in February.

In an attempt to reduce the spectrum share held by the country’s largest asset holder EE, and its parent company BT, the regulator imposed a cap of 340MHz on all UK operators for spectrum expected to be usable by 2020.

Having already threatened legal action if safeguards were not put in place to cement the position of smaller operators, 3 UK CEO Dave Dyson today described Ofcom’s proposal as a “kick in the teeth” for consumers which would push up prices.

Dyson added Ofcom was “making decisions that increase the dominance of the largest operators.”

“The mobile market is imbalanced and failing customers,” he said: “Ofcom has shown little interest in tackling the problem. We will consider our response as a matter of urgency.”

Mark Evans, CEO of Telefonica-owned O2, said the announcement “falls short of expectations” but added it was important to “press ahead with the auction quickly”.

EE CEO Marc Allera said: “While we don’t agree that spectrum caps were necessary for this auction, our focus remains on investing in our network.”

“We look forward to bidding for additional spectrum in this auction.”

Spectrum caps
Ofcom said its auction rules were drawn up to ensure “strong competition” in the sector, which the regulator had been urged to review by pressure group Make the Air Fair, which is backed by several operators including 3 UK and quadplay firm TalkTalk.

The result is two individual caps, one of 255MHz per operator on spectrum defined as “immediately usable”, and a 340MHz limit on bandwidth usable in 2020.

Effectively, this would ban EE from bidding in a forthcoming auction for 40MHz of 2.3GHz spectrum, which is expected to carry 4G services.

The 340MHz cap will limit the activity of both EE and Vodafone in a second auction – also scheduled for this year – for 150MHz in the 3.4GHz band earmarked for use with 5G services.

To adhere to the new rules, EE is able to win a maximum of 85MHz of 3.4GHz spectrum, while Vodafone is able to increase its combined allocation across the two auctions by up to 160MHz.

The current status of holdings from O2 and 3 mean they are unable to break the cap between the two auctions.