Mobile broadband plans for the UK called into question

Mobile operators will need to “mark their significant contribution to broadband universal service agreement,” which is looking to provide broadband connection speeds of at least 2Mbps to every UK household, according to the governments Digital Britain interim report.

A partner at Analysys Mason, Matt Yardley said “This raises a big question about how to cost-effectively roll out mobile broadband to the whole population.”

Some of the details in the governments report seem to lack clarity, although it had made a few practical recommendations said Yardley. He said “The government said it supports releasing extra spectrum, including the digital dividend at 2.6 GHz and airwaves vacated by the switchover to digital TV. Both of those could play a role in mobile broadband, but it hasn’t said how that bandwidth should be allocated.”

Kevin Russell, the CEO of 3 UK agreed, arguing that rather than auctioning of the spectrum the government and Ofcom should reallocate it evenly between the existing mobile operators in the UK.

In a recent statement he said “The opportunity here for people in the U.K. is clearly set out in this interim report. What is lacking is clarity as to if this will be driven by access and quality of service or the desire for Treasury income. I believe the former provides the best way forward for all.”

A public auction that would sell off spectrum could impact the UK mobile industry in a negative way explained a spokesman for 3. He said “The hunger from operators for bidding on spectrum is debatable, and a new player could come along, build out another network and cause even more fragmentation in the market.”

A consideration as to whether the current time-limited mobile licences will be changed to last indefinitely is also being looked into by the UK government. The report stated “The further into a fixed-term licence one goes the greater the disincentive to invest.”

There would be a greater investment certainty from current 3G operators if the time-limited licences were scrapped said the government. A 3 spokesman commented “Given the choice between holding a licence for 20 years or having one indefinitely, we would take the opportunity to go for the latter.”