Orange has warned Oftel that unless the UK regulator stops pushing for further reductions in price, it may cut back on its plans for 3G spending.
The regulator is trying to clamp down on charges related to cross-network calling. Orange has said that if reductions are made in one of the most profitable areas of its business, it could seriously affect the amount the company can afford to spend on development of 3G services.
The roll out cost of 3G networks is phenomenally high once licences, infrastucture and development costs are all added up. While the licences stipulate that the operator needs to cover only 80% of the UK population within the next five years, Orange had planned to cover much more than this. It has now warned Oftel that unless it backs off, it may only meet the minimum requirements. The UK’s high population density means this will not require particularly widespread coverage.
The other three networks in the country have shown their support for Orange’s moves, protesting against Oftel’s heavy hand. The regulator will be feeling the pressure because if it persists, it will risk splitting the nation into areas with and without 3G access which could anger consumers outside the areas covered.