3 demands slice of airwaves

Texting on BlackberryThe owner of 3 has reportedly threatened to abandon the mobile phone business unless it is guaranteed a prime slice of the airwaves in a £4 billion auction.

Telecoms watchdog Ofcom is preparing to sell off a large chunk of the fourth generation (4G) spectrum at the end of the year, which will allow companies to build lightning fast networks for quicker mobile internet access.
Hutchison Whampoa, the owner of the smallest UK mobile operator, 3, believes it will lose ground to its rivals unless the auction rules are changed, according to the Sunday Times.

The report claimed Hutchison's managing director Canning Fok warned David Cameron that the company was prepared to stop investing in the business or even quit the telecoms market unless it received assurances it would be protected in the forthcoming 4G auction.

But sources told the newspaper that Hutchison was unlikely to carry out its threat given the estimated £10 billion it has invested in 3 over the past decade.

Hong-Kong conglomerate Hutchison is the UK's biggest foreign investor and is run by Li Ka-shing. It owns ports including Felixstowe, Superdrug the chemist, and Northumbrian Water.

Smartphones and some tablet computers such as the iPad are already geared up to run on the 4G network.

But the auction is more than 18 months behind schedule as a result of bitter wrangling between Britain's four mobile phone providers, which has seen the UK slip further behind America in terms of its roll-out.

Hutchison is understood to argue that 3 should be guaranteed a portion of the most prized airwaves because it has a smaller spectrum than its rivals.

But competitors such as O2 and Vodafone say this would allow 3 to pick up a slice of the most valuable spectrum on the cheap. They argue Hutchison has deep enough pockets to compete in the auction.
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