17 January 2008
Ofcom's plan to re-sell a portion of the radio spectrum to 3G network providers has been fiercely criticised by its current owners, the Guardian reports.
Vodafone and O2 currently use the spectrum to run part of their own mobile phone services - and said yesterday that the watchdog's decision will cost them a total of £13 billion.
The decision to sell off the 900Mhz spectrum to rival mobile phone firms stems from an EU ruling last year, which said that the market must be "liberalised" in order to encourage competition.
Both Vodafone and O2 have occupied the spectrum since handsets first came into use in the 1980s.
Subsequent auctions of the 2G and 3G spectrums - in the 1800Mhz and 2100Mhz bands respectively - have led to the market being strictly segregated depending on the kind of service run from it.
However, under Ofcom's plans, announced last September, these restrictions are to be relaxed - and phone firms can run any kind of service on any band.
Complaining to the watchdog, Vodafone described the reforms as "hypothetical and fanciful".
Meanwhile, O2 described them as "based on a flawed policy mechanism", as well as "poorly researched", "inadequately supported by evidence" and "wholly speculative".
The 900Mhz band is scheduled to be auctioned off next year.
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