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Three may consider legal action if spectrum imbalance persists

Three boss Dave Dyson says he may consider mounting a legal challenge if Ofcom does not change how spectrum holdings are regulated and controlled

Dave Dyson, CEO at mobile network operator (MNO) Three, has raised the possibility of mounting a legal challenge if Ofcom does not take action to correct the imbalance in mobile radio spectrum holdings in the UK.

Dyson said Three was “passionate about spectrum because we are passionate about a level playing field”, and if Ofcom did not move to change how spectrum ownership is regulated and managed, Three would have to seriously consider its next steps, he said.

“That possibly leads us down a path where we consider a legal challenge,” he said during a conference call to mark Three’s end-of-year financial results announcement.

Three, along with competitor O2, controls substantially less of the currently available mobile spectrum in the UK than the two larger players, EE and Vodafone.

It recently launched a campaign called Make The Air Fair that encouraged consumers to pressure Ofcom to impose a cap on the amount of spectrum the larger operators can own. Three wants the law changed to prevent any one MNO from owning more than 30%, and believes that doing so would offer consumers more choice, improved performance, faster speeds and lower prices.

Ofcom has already barred both EE and Vodafone from bidding for an immediately usable tranche of spectrum in the 2.3GHz band, which is soon due to go under the auctioneer’s hammer.

Dyson pointed out that Three customers used an average of 6GB in December 2016, nearly five times more data than the average mobile user, despite having the smallest customer base. The operator claims that 35% of mobile data used in the UK transits its network, 30% of it comprising YouTube videos.

Total revenues at Three rose by 4% compared with 2015, hitting £2.28bn, and earnings before interest, dividends, depreciation and amortization (Ebitda) less capex grew by 12% to £367m. Over the same period, its active customers grew by 2% to 9.71 million, each spending an average of £19.24 a month, down 87p on the year before.

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Three said it had improved its indoor network coverage to 95% of the UK at the end of 2016, up from 78% in December 2011, and was continuing to roll out more low-frequency spectrum and voice over long term evolution (VoLTE) calling services, as well as seamless Wi-Fi calling on iPhones and some Android devices, which will become available by the end of the first quarter.

It also reported that its Feel at Home roaming plan had saved customers £2.4bn during 2016. The programme now covers 42 other countries and 80% of its customers’ travel outside the UK, said Three.

It added that roaming in Feel at Home destinations outside the European Union – the service is available in Australia and the US, among others – accounted for 90% of the total savings made.

Dyson said Feel At Home was still one of Three’s most popular customer benefits, and added that he was committing to retaining it across the EU whatever the outcome of the UK’s Brexit negotiations.

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