Three may run out of capacity if UK spectrum auction falls through

Mobile telecommunications operator Three has issued a warning that it may run out of capacity at urban areas in the UK if the 4G mobile spectrum auction doesn’t push through as scheduled next year. The warning comes as smartphones, tablets, and laptops become more and more popular with consumers, leading to increased mobile data requirements from network providers.

While I was meeting with a colleague of mine earlier at a coffee shop, I spotted several patrons toting around laptops, while others tapped endlessly on their tablets and touchscreen smartphones. You can probably observe the same scenario in the office where you work in or at some other public place where people are bound to rely heavily on mobile gadgets to connect with their social networks and keep in touch with business contacts.

Earlier this year, communications regulator Ofcom had announced that a sector of the mobile spectrum that is equal to around 75% of what is currently in use will be put up for sale. This is over 80% more than what was previously sold in the 3G auction held back in 2000.

The auction was previously set to take place in early 2012, but the date was pushed back because of the threat of law suits from operators O2, Vodafone, and Everything Everywhere. These three operators are trying to prevent spectrum shares from being sold off as they are still in the process of reallocating their spare 2G spectra to 3G.

Unlike these three companies, Three does not have any spare spectrum to fall back on. As a result, the provider will eventually run out of capacity as mobile data demand continues to increase–unless it is able to acquire a share of the new spectrum at the Ofcom auction. Moreover, a delay in the 4G spectrum auction is also predicted to cause much suffering to business establishments and residents in the UK.

Three’s chief executive, David Dyson, explained the provider’s stand at a press briefing held recently in London: “There is a huge financial incentive for rival operators to delay the auction. We are worried that the other three will attempt to squeeze us out of the market.”

This isn’t the first time that Three has expressed fears at forced out of the market by the three major operators. As a response to Three’s concerns, Ofcom has added a cap on the amount of 4G spectrum that may be won so as to keep things fair between the operators.

Source – Digital Spy