Everything Everywhere bringing 4G to UK in September

Will the mobile phone conglomerate gain a valuable Apple boost?

Everything Everywhere, the mobile phone consortium made up of T-Mobile and Orange, has won approval from Ofcom to roll out an LTE service (more commonly, though perhaps incorrectly), known as "4G") on unused areas of its spectrum a year ahead of the official auction for LTE licenses.

The group is making the most of the fact that it, unlike its major UK competitors, has spare capacity on the 1800mhz portion of the spectrum, and will be launching the high-speed service on 11 September. Vodafone, O2 and Three have all expressed anger at Ofcom's move, with Vodafone giving a strident comment to The Verge's Vlad Savov:

We are frankly shocked that Ofcom has reached this decision. The regulator has shown a careless disregard for the best interests of consumers, businesses and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive 4G market.

The line is an odd one. Allowing the only regulator with the technical capacity to improve their service to do so seems unlikely to be a net negative for the public at large. Far worse would be Ofcom artificially holding back the state of British technology just for perceived "fairness".

That's not to say Vodafone don't have anything to be angry about; the fact is that it could have moved just as fast as Everything Everywhere if the glacial pace of the digital switchover weren't holding up the spectrum it needs.

But why quite so mad? Well, Savov points out one very interesting point when it comes to the timing of Everything Everywhere's roll-out. They'll turn on the service on 11 September; on 12 September, Apple is expected to announce a new iPhone with LTE technology.

Savov writes:

The market edge that EE gains over its competitors by being first with fast mobile broadband would, in such a scenario, be exponentially magnified. Two of the hurdles to any carrier seeing rapid adoption — educating users about the benefits of the new technology and making them see value in paying a higher price — are central to Apple's strength as a company. In piggybacking on the prospective iPhone announcement, EE would enjoy the halo effect of having Apple conduct the LTE education sessions in advance, plus the comfort of knowing it can charge a premium without consumers scoffing (too much).

I certainly recall switching to O2 to get the original iPhone back when it was exclusive to that network; whether people will switch at the same rate to get a new iPhone on a faster network is something we will find out next month, it appears.

4G iPads sit in an Apple Store in Covent Garden. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR