<h1 class="articleh1"></h1>Vodafone and T-Mobile
By Umar Chaudhry
A possible takeover of T-Mobile by Vodafone, has created considerable comment. Vodafone has a 25% share of the UK market, behind O2. T-Mobile, owned byDeutsche Telekom, has a 15% share.
There is an argument that spectrum ownership is vital in understanding why Vodafone would be interested in purchasing T-Mobile.
In February, Vodafone and Hutchison Whampoa, which owns mobile operator 3 in the UK, announced plans to merge their Australian mobile phone businesses.
All modern GSM phones freely support 900 and 1800MHz: so the consequence of a merger could equally be T-Mobile customers switching to 900MHz rather than Vodafone users returning to 1800MHz
The annual AIP payment that Ofcom is going to demand for 900MHz would put Vodafone off as they could get 800MHz (or lower) spectrum for a simple and easy one-off payment. 1800MHz is a positive feature on T-Mobile's account, while 900MHz is about to become an operational expenditure of the sort despised by big companies.
Also, while existing licences for 900MHz, 1800MHz and 2.1GHz are all technology specific, Ofcom has made it clear that all such restrictions will vanish over time.
It's more straightforward to construct a network operating at 900MHz, however T-Mobile has already built a countrywide 1800MHz network. Vodafone could even hold on to a small slice of 900MHz to fill the really rural areas, if necessary.
A Vodafone/T-Mobile combination would certainly disturb the competitive marketplace, and possibly prompt further consolidation. Ofcom's most recent report predicts that by 2022 there will only be two operators left in the UK.
Umar Chaudhry is a legal assistant to Izaz Ali (Izaz.Ali@lawdit.co.uk) Izaz is a commercial lawyer who specialises in information technology law and intellectual property law with an emphasis on IT, escrow, online and off-line contracts, and the buying and selling of online businesses.