Government Appeals Mobile Phone ‘Right To Roam’ Decision

Press Release 26 August 1999

The Government will launch an appeal against a judge’s ruling that existing mobile phone operators should not have to let new companies use their networks (roaming) as a condition of gaining a Third Generation licence, it was announced today.

The Government plans to auction five licences to operate Third Generation mobile phones, which will receive information up to 200 times faster than current mobiles, allowing users to surf the internet, rapidly download e-mails, music and high quality pictures and even hold video-conferences on the move.

Government expects that some existing operators will bid for the new licences, but is keen to encourage possible new operators who would increase competition in the mobile phone market. The Government wants to see existing mobile operators who win new licences agreeing to allow customers of a new entrant to use their network while the new entrant builds up its own network. In the case brought by One2One the judge ruled that government was applying undue pressure on
existing operators to consent to changes in the terms of the existing licences and that this was beyond its power.

Current mobile operators who do not bid for a third generation licence or are unsuccessful in the auction will not have to accept roaming.

DTI minister Helen Liddell said:

"We are determined to promote competition for third generation mobile phone services. This will be good news for consumers and will help to make the UK the best place for e-commerce in the world.

"Increased competition will mean lower prices and a faster rollout of innovative services. Without roaming a new company will be at a significant disadvantage to existing operators."

The Government has launched its appeal because it wants to put into place fair conditions for both existing operators and potential new entrants. The Government expects roaming to take place on a commercial basis.

But it is important that if agreement cannot be reached then the Director General of Telecommunications should be able to step in and determine a fair and reasonable rate for both parties.

Existing operators will not be at a disadvantage because their spare capacity will be used by roamed traffic, enabling them to receive extra revenue.

Charges to new operators will allow them to compete effectively but it will also give them the incentive to roll out their networks quickly. New operators will have until 2007 to cover 80% of the population or they could lose their licence. The right to roam will cease after 2009.

Notes for Editors

1. In early 2000, the Government plans to auction five licences for operators of Third Generation networks.

2. In offering the licences for auction the Government is opening the opportunities of Third Generation to the widest possible range of individual companies or consortia from all sectors including broadcasters, telecoms companies, multimedia content providers and retailers. Prequalification for the auction will be simple and will not involve a technical test.

3. Two measures have been announced by the Government to enable new entrants to compete. First, the offering of five licences (one more than the existing number of mobile operators) with the largest licence reserved for a new entrant. Second, the mandating of roaming agreements if they cannot be reached through commercial negotiation. Roaming is the use by a customer of one mobile operator of another mobile operator’s network to make or receive a call - usually because the customer is out of range of his home network.

4. First generation networks provide simple analogue voice telephony; whilst second (current) generation adding some data services like fax and-email to basic voice service, with higher rate data capabilities expected over the next few years. Third Generation services will enable data transfer services up to 200 times faster than current mobile phones and will provide high quality, interactive services on the move.

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