UK telecoms regulator Ofcom is to relax regulation of the civilian radio spectrum – letting 3G operators roll out network coverage more slowly but potentially opening up the wireless market to new entrants.

The current owners of third-generation (3G) licences – Orange , 3, 02, T-Mobile and Vodafone – have been pressuring Ofcom to extend the 2007 deadline for achieving 80% coverage. Ofcom’s Spectrum Framework Review granted their wish but also recommended that market forces, not regulators, should decide future decisions on radio spectrum allocations.

This decision, coupled with proposals to open up more licence-exempt spectrum to businesses and allow spectrum trading, could prompt a flood of new competitors entering the mobile market. “This market-led approach to spectrum management will reward innovation and extract the maximum value for customers from this important resource,” said Stephen Carter, Ofcom’s CEO.

Ofcom expects to have deregulated up to 7% of the radio spectrum by 2010, although has provision to losen its grip on up to 70% of the overall spectrum.

The initial auctions of the 3G licences raised a lot of money for the Government’s treasury but placed a high barrier to entry on the market. The subsequent controversy made this review Ofcom’s first priority when it was created in December 2003.

While mobile phone companies may not respond favourably, other tech companies – notably Microsoft and Intel – will be pleased with a lobbying job well done after the initial cellphone revolution left them relatively excluded. Interested parties have until 15 February 2005 to respond to the review, which is available in full at www.ofcom.org.uk. Ofcom will publish a consultation document into 3G and wireless broadband in December 2004.