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Britain's 5G mobile auction gets green light as Three court challenge fails again

Christopher Williams
5G networks are expected to improve mobile internet speeds and capacity - Westend61

An attempt by the mobile operator Three to block a multibillion-pound sale of airwaves for new 5G networks has failed in the Court of Appeal, clearing the way for Ofcom to begin the auction within weeks.

Three, owned by the Hong Kong conglomerate CK Hutchison, had sought to force the regulator to impose tighter restrictions on the maximum share of mobile spectrum any single operator may own.

The Court of Appeal swiftly rejected its claims today, however. After months of delays Ofcom can now begin preparations for an auction due to begin in early April .

A spokesman for the regulator said: "The Court of Appeal has very firmly rejected Three’s application for permission to appeal on all grounds.

“We welcome this decision, and will now press ahead with releasing these important airwaves. This new capacity will allow mobile companies to offer more reliable reception, and to prepare for future 5G services.”

Ofcom will sell airwaves in two frequency bands. One is immediately usable by operators to improve 4G coverage and capacity but the majority of the spectrum on the block will be used in forthcoming 5G networks. Due to be introduced from around 2020, the new technology is expected to bring faster internet access for consumers and is being explored as a foundation of driverless cars and manufacturing automation.

As the smallest of Britain's four mobile operators Three claimed that without tougher rules it could be squeezed out by BT, which already has the largest share of the airwaves on 45pc. Ofcom set the post-auction cap at 37pc but Three claimed it had made errors and should have been more strict.

Its defeat on appeal is a boost to the Government, which aims to position Britain in the vanguard of countries deploying 5G and had been frustrated by delays. Three also attracted criticism from rival operators including O2, with which it previously hoped to merge to gain heft. Competition authorities blocked the deal in 2016.

Despite its defeat Three said it had been right to appeal and had won "clarity" on the auction rules.

A spokesman said: "First of all this has not caused any delay to the delivery of 5G services to UK consumers.

"Ofcom is now much clearer that a 37pc cap is the level they believe is appropriate to maintain competitive balance. It is vital that Ofcom, as a minimum starting point, sticks to this number when additional spectrum is auctioned off.

“We still believe that a 37pc cap is too high if the policy objective is to have a competitive four player market and we would like to see it set at a lower level in the future.”

O2, which has a smaller share of spectrum than Three, said the auction should start as soon as possible. Its weak position has been viewed by investors as an obstacle to the stock market debut sought by its Spanish owner Telefonica.

Ofcom is currently processing applications from auction participants. As well as the four main mobile operators the field could include Virgin Media, which is seen as a potential buyer of O2 in lieu of a float and could use airwaves as a bargaining chip.