O2 has staked its claim to be the first UK operator to switch on a 3G network over 900MHz spectrum in London. Taking advantage of recent licensing changes, this latest rollout in London follows on the heels of similar deployments in Birmingham, Leeds and Manchester; the London deployment is expected to deliver a 50 per cent increase in capacity and a 30 per cent increase in speed.

The UMTS900 spectrum was made available in January, when UK regulator Ofcom granted operators permission to use the previously 2G-only 900MHz band to deploy 3G services. This “refarming” policy is intended to increase mobile broadband rollout, but has attracted controversy thanks to the inconsistent way in which spectrum has been allocated in the UK in recent years. Everything Everywhere (the product of a merger between Orange and T-Mobile in the UK), for example, has no 2G spectrum in the 900MHz band and initially objected to what it saw as an unfair gifting of newly-valuable 3G spectrum to competitors Vodafone and O2 by the regulator.

Everything Everywhere dropped its legal bid to prevent the changes last year, but has since called on Ofcom to cap the amount of low-frequency LTE real-estate any one telco can own. The UK’s smallest operator, 3, has joined calls for caps. CEO Kevin Russell said that Ofcom’s failure to offer all operators a fair crack of the spectrum whip will drive smaller operators out of the market and cause price increases for end users. Russell told delegates at a London policy debate this week that, in markets where a smaller newcomer had survived, calls cost 19 per cent less and data costs were 28 per cent below that average in less competitive markets. Russell added that 97 per cent of traffic on 3 UK’s networks was data and that the firm sells more iPhones than any other operator; with no 2G spectrum to convert, it’s easy to see why the smaller player feels it’s in danger of being squeezed out of the market. In other countries such as Ireland, France and Germany, 3G900 spectrum was parcelled up and sold to a broad spread of operators in an effort to ensure competition.