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Attempts to bring superfast 4G mobile broadband services to Britain could still be held up by litigation as crunch talks between the telecoms industry and officials enter the final week.
Those close to the confidential negotiations have said that discussions are still “in the balance”, and have warned that the brinkmanship between the warring telecoms groups has meant that the UK could face the prospect of slipping behind much of the world in its mobile communications.
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The talks include key issues such as accelerating the long-awaited auction of the 4G spectrum, as well as streamlining the planning system for faster rollout of mobile masts. One person said that progress had been made, and that participants were more hopeful, but no resolution had yet been reached.
The telecoms operators all want to launch 4G services as quickly as possible but the move by regulators to authorise Everything Everywhere (EE) to launch a network based on existing spectrum rather than wait for the auction process to conclude has angered rivals. They fear that this first-mover advantage could be critical to winning customers.
Talks to end the threat of legal action from its rivals are being held between the telecoms operators and Ofcom. The groups are making proposals to create a more lasting legal truce, but there has been no resolution yet with just a week to go before the end of a government-brokered month-long standstill agreement that prevents legal action as well as any 4G launch.
There remains the threat of “years of litigation”, according to one person close to the talks, if other operators seek to block any rollout of the mobile broadband services being planned by EE. In turn, there could be legal action to interrupt the already long-delayed auction of spectrum that could be used by the other groups for 4G, which had been expected later this year.
4G has been pushed to the highest priority for Ofcom, and the last act by outgoing culture secretary Jeremy Hunt was to try to broker a resolution. Any decision to litigate against the 4G auction process would be a blow to the government’s ambitions for the digital economy, having identified superfast mobile broadband as a key means of driving economic growth.
The result could have a huge impact on government finances next year given the £4bn that could be raised by the auction of 4G spectrum, according to analysts, as well as an estimated boost of national GDP by 0.5 per cent, or £75bn over a decade.
The government has put aside more than £800m in funding to ensure the UK has the best mobile and fixed broadband in Europe, but has been helpless to prevent a legal escalation that has held up 4G services for four years already.
The constant threat of legal action has forced a number of consultations and proposals made about how the government would auction off the necessary spectrum.
In the meantime, many other countries from the US and Germany to Uzbekistan and Lithuania have adopted 4G networks, which can rapidly transmit mobile data such as videos and social media opening up greater possibilities for phones and tablets on the move. The 4G network can also replace fixed line broadband in places that are difficult to reach.
EE, the UK’s largest mobile network with the Orange and T-Mobile brands, said this month that it wanted to launch 4G in the UK this year, but did not give an exact time owing to the standstill agreement that prohibited the launch of the network ahead of the talks.
Even so, EE said that it planned to reach 16 UK cities by Christmas and 98 per cent of population by 2014. However, the other three operators – O2 , Vodafone and Three – will need to wait to buy spectrum at the 800MHz frequency at the auction.
Those people with knowledge of the talks say that four separate working groups have been formed to help accelerate the auction date, and the time taken to prepare the airwaves for 4G use.
The talks also include the early formation of a company called MitCo that will be tasked with preventing any interference with services such as TV. The cost of preparing the spectrum for 4G use could be about £100m, according to people with knowledge of the situation. A group is also looking at changes required to streamline planning consents for mobile sites.