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3 may run out of capacity before end of 2012

Mobile network warns delays to 4G spectrum auction may have a negative impact

UK mobile network 3 has warned it may run out of capacity as early as the end of next year unless the government auction of the 800MHz and 2.6GHz radio spectrums goes ahead.

In January this year, Ofcom said mobile networks that had spare 2G spectrum would be able to reallocate it to offer 3G services in a bid to "increase mobile broadband speeds, deliver improved in-building coverage and widen mobile broadband coverage in rural areas" until the auctions take place.

Initially, Ofcom said the auction would take place at the beginning of 2012, however it has now revised its timescale and moved the auctions expected start date to Q2, following he threat of legal action by O2 in June this year, and that’s if the scheme doesn’t hit any further delays.

However, as 3 has the smallest spectrum of all the UK’s major networks, the mobile operator doesn’t have any spare capacity to reallocate.

3 also hinted that the other networks feel threatened and that’s why they’re hampering the start of the auction.

"There is a huge financial incentive for rival operators to delay the auction. We are worried that the other three will attempt to squeeze us out of the market," said chief executive David Dyson.

“We carry nearly 50 percent of the UK’s mobile data traffic and yet we have the smallest amount of spectrum. One way the other networks have of slowing us down is to delay the auction, so that we hit congestion problems, which might force us to lower the value of our proposition.”

However, despite his comment, Dyson believes the auction “will go ahead next year and therefore congestion will not happen," he said.

"We have been assured by the government and Ofcom that distortions will be rebalanced when the auction happens,” he said.

In September, in a move that was seen by some as attempting to sway the government, 3 revealed it will provide 11 rural communities in the UK with free mobile broadband in a bid to help them get online. The mobile network has also recently offered its monthly tariff customers unlimited data, without a cap, for just £3 per month.

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