Three gets feisty as it prepares important battle for spectrum

(Image Credit: iStockPhoto/Viktor_Gladkov)

After the EU Commission rejected Three’s appeal for permission to merge its operations with O2 in May this year, the mobile operator is seeking ways to remain competitive in a market dominated by EE and Vodafone. 

Speaking at a business update, Three UK CEO David Dyson said of the EU ruling: “I think it was the wrong decision. UK consumers have been robbed of the best mobile infrastructure in Europe. Italy will end up with better infrastructure than UK in the short term.” 

Dyson believes the merger with O2 would have enabled consumers to benefit from a bigger network with more spectrum, better coverage, and faster data speeds. EE and Vodafone, meanwhile, continue to lead the market with far more subscribers and spectrum ownership. After the UK’s biggest fixed-line provider, BT, was authorised to acquire EE, there has been fears of how rivals will compete. 

At the update, Dyson said there will be no further attempts for a merger and the company has to “accept that decision, move on, and work with what we’ve got.”

Of course Three is now seeking to bolster what they’ve got in order to improve their chances against bigger rivals. With an upcoming spectrum auction, Three is hoping Ofcom will prioritise Three over EE and Vodafone. Dyson warned prices would rise and competition would suffer if the operator’s rivals were able to acquire large amounts of spectrum at the next auction. 

Stephen Lerner, Three’s general counsel and head of regulatory affairs, has said the network is convinced EE’s owners BT and Vodafone would take legal action should the regulator decide to rule in favour of Three. Lerner added that Three would themselves consider legal action if Ofcom decided to place no restrictions on the auction. 

Three finds itself more desperate for spectrum than BT and EE, yet fears if the matter goes to court there’s a chance the bigger company will end up walking away with the spectrum while leaving Three with less cash and without the assets it needs. 

CK Hutchison, Three’s owner, has long complained that Ofcom is an ineffective regulator because there is a much lower standard of appeal than any other. With the incoming Digital Economy Bill, the government is seeking to change that and level the appeal process with other regulators. 

Do you believe Three should be given priority in the upcoming auction? Let us know in the comments. 

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