LONDON, Sept 6 (Reuters) - Britain's smallest mobile networkoperator, Three, wants the regulator to rein in market leader EE by setting a 30 percent cap on the proportion of airwavesan operator can own.
Such a move would boost competition in a market thatdelivers "mediocre" service to customers, it said on Tuesday.
The operator, owned by Hong Kong's CK Hutchison Holdings, said it needed more spectrum to grow its customerbase and offer bigger bundles of data, a strategy it is pursuingafter its merger with Telefonica's O2 was blocked by EUregulators in May.
EE, owned by BT, has 42 percent of the spectrumcurrently available, while Vodafone has 29 percent andO2 and Three have 14 percent and 15 percent respectively, Threesaid.
British competition authorities waved through BT'sacquisition of EE in January without making BT sell any of itscombined spectrum, to the surprise of some in the industry.
Three UK's Chief Executive David Dyson said he wantedregulator Ofcom to impose the 30 percent cap at the nextauction, expected next year, as it would provide better balancein a market with four operators.
"All operators other than EE-BT are below that 30 percentcap right now," he told reporters on Tuesday. EE should not beprecluded from bidding, he said, but it should be required tosell some of its existing portfolio if it wanted to buy newspectrum.
Dyson also said EE and Vodafone were not using all thespectrum they owned, which he said indicated that they boughtthe airwaves in order to deny Three or O2 capacity.
Vodafone, however, said Three had not faced any barriers inbuying spectrum.
"These are some pretty surprising comments from an operatorwhich has been in the UK market for more than 15 years and hashad ample opportunity as well as the financial resources to bidfor spectrum when it's become available," a Vodafone spokesmansaid.
EE, which unveiled faster network technology for the latestsmartphones on Tuesday, said it used all its spectrum to thebenefit of customers.
"We pioneered 4G and we are a leader in network speeds," aspokeswoman said.
"We are unique in our commitment to expand 4G coverage to 95percent of the UK's landmass by 2020, further than any other UKnetwork has done, and will continue to ensure the UK stays atmobile technology's leading edge."
An Ofcom spokesman said the regulator planed to publish aconsultation in the autumn, which would set out its plans forthe next auction of spectrum, of 2.3-3.4 GHz.
Dyson said Three was performing as well as it could with theassets it had, pointing to a 12 percent rise in first-halfearnings to 348 million pounds and a 2 percent rise in customernumbers to 9.16 million.
"The industry we are operating in is pretty mediocre, andtherefore if we can perform in that environment then we shouldtake market share," Dyson said. (Reporting by Paul Sandle; Editing by Susan Fenton)
Vodafone (VOD)