Three could run out of network capacity in London

MOBILE OPERATOR Three will run out of network capacity in London and other urban areas by the end of next year if spectrum auctions don't go ahead, according to the firm's CEO.

Spectrum auctions are due to take place in mid-2012, which is already slightly later than some had expected.

According to the BBC, Three said the timetable was "already slipping" and that it is vital that the operator gets its fair share of the spectrum, adding that rival operators such as O2 and Vodafone might try to delay the auction.

Three CEO Dave Dyson said at a briefing in London, "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."

Wireless capacity in large urban areas such as London will begin to run out by the end of next year, Dyson said. But he added, "I believe the auction will go ahead next year and therefore congestion will not happen."

O2 and Vodafone currently hold the licenses for the UK's lower frequency 2G airwaves because they were the first operators in the UK. Meanwhile, Orange and T-Mobile have a slightly higher frequency band that isn't as good for mobile services.

As the newest operator, Three doesn't own 2G spectrum, which is needed for basic phone calls, and gets access to it via a network sharing deal with T-Mobile.

Telecoms regulator Ofcom has proposed a cap on the amount of spectrum that can be bought to stop Three from being edged out of the market. µ