O2 and Three put brakes on Ofcom's spectrum auction

Ofcom's plans to auction additional spectrum worth 190MHz was put on hold this month pending the European Commission's ruling on a possible merger of Three and O2 networks. 

Both networks 'welcomed' the delay which came about after Three and O2 wrote to Ofcom threatening legal action.

The spectrum in question was previously owned by the military and comes within 2.3 and 3.4 GHz bands which are ideal for 4G speeds. Ofcom has now agreed to postpone the auction till May of 2016 when the European Commission is to reveal its findings. Ofcom said that the postponement is for “reasons of good public administration.”

BT and EE are merging; what it means for consumers

“Ofcom will not now commence the auction process until the European Commission has taken its decision as to whether the proposed merger between Telefonica UK Limited and Hutchison 3G UK Limited is compatible with the common market,” said Ofcom.

Did O2 and Three spoil the Ofcom party?

Earlier, Telefonica and Hutchinson, owners of O2 and Three respectively, wrote to Ofcom stating that they would seek judicial review if Ofcom went through with the spectrum auction. The £10.25bn merger between O2 and Three will result in a much larger enterprise with resources to bid effectively for new spectrum. The new group will also have to compete with the resulting entity from BT's merger with EE.

What does Ofcom's delay mean for the consumer?

When fewer and larger firms dominate a certain market, they have the leverage and power to keep rates high to favour their own businesses and continue to earn profit at the cost of consumers who have little choice.

Ofcom triples spectrum fee! Brace for your next bill

Ofcom protects your rights from any malpractices that network operators may indulge in to dominate the market, and thus ensures that you get the best offers as well as the best customer service at a low cost. If the mergers between Three and O2 as well as BT and EE receive official sanction, there will be two large enterprises competing with each other to corner profits. At the same time, they will also be able to invest a lot more in infrastructure to ensure that the best services reach every user across the country.

Ofcom will have to maintain the balance in the future to ensure networks can invest in infrastructure and can also offer the best services in the years to come.

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