Three UK CEO considering legal action over 5G auction rules

James Pearce
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Dave Dyson warned Hutch-owned Three UK could still launch legal action over Ofcom's 5G spectrum auction proposals, but denied doing so would slow down 5G rollouts

Three UK CEO Dave Dyson has denied trying to delay the deployment of 5G in the country if it opts to challenge and Ofcom ruling around spectrum auction rules.

Dyson was left disappointed last month after the UK regulator chose to impose caps on the likes of BT and Vodafone in upcoming spectrum auctions, claiming Ofcom had not gone far enough. After the ruling, Dyson warned the Hutch-owned mobile operator could seek a judicial review over the decision.

Speaking following Three’s latest financial results, Dyson said it is still contemplating legal options, but denied claims from rivals that going to the courts could slow the deployment of 5G across the UK.

“We had hope Ofcom would take a different approach in the next auction. Most people I speak to agree with my view that the mobile industry in the UK is mediocre at best. I am disappointed by the latest proposal. It continues to put at risk Ofcom’s stated goal of a competitive UK mobile market.

“In terms of next steps, we are still considering whether we should ask the courts to give an independent view of whether Ofcom has acted reasonably. If we were to go down this path… it’d likely be just a three month process from beginning to end. By way of context Ofcom has said it does not expect commercial deployment of 5G until 2020. The setting of standards for frequency bands will not be completed until 2019. It is a very safe bet that even with a delay of a few months the that even with a delay of a few months the spectrum auction will have taken place in good time so there will be no long-term negative impact on the rollout of 5G in the UK.”

Dyson said the three-month time frame was “pretty standard” when challenged over this, although he did not speculate what the impact on 5G would be if the courts ruled in favour of Three. He was keen to point out that the operator has not reached a decision yet on taking legal action.

A number of industry bodies including the GSMA have already warned that European countries risk falling behind Asia and the US in 5G deployments, although sources told GTB recently that BT’s EE plans to do some small 5G deployments in 2019.

Three does also have access to some 5G spectrum, which it gained during its recent acquisition of UK Broadband.

Dyson was speaking following Three’s latest financial results for the first half of 2017, in which total revenue grew 10% over the previous year to £1.16 billion. Its total margin is up 6% to £725 million, although EBITDA was down 2% to £341 million, which Dyson blamed on increased capital expenditure.

Dyson added: “This encouraging set of results is testament to our continued improvement in customer satisfaction, which remains Three’s core focus and clear point of differentiation.  The extension of our Feel at Home offer, which now covers 60 destinations worldwide, and the launch of Go Binge, are exciting examples of how we continue to help customers get the most from their devices. 

“Our market-leading satisfaction and low complaint levels are a result of the hard work of the thousands of passionate staff across the Three UK business.”