Hi3G, the company which operates the mobile telecommunications service "3" in Sweden, has acquired the spectrum in the 2.6 GHz band (2570-2620 MHz TDD), previously owned (but never used) by Intel. The acquisition was cleared by the Swedish Post and Telecom Agency (PTS) on 22 December 2010.
The 2.6 GHz frequency band was earlier appointed as an expansion band for the UMTS/IMT 2000-system, but in 2008, following the European Commission decision 2008/477/EC, the conditions for the availability to use the 2.6 GHz frequency band widened to include terrestrial systems capable of providing electronic communications services in the European Community.
The PTS limited the number of licences available in Sweden and assigned the licences to five applicants (Hi3G, Intel, Tele2, Telenor and TeliaSonera) following an auction in 2008.
Hi3G applied to acquire Intel's frequency space on 9 December 2010. The application was approved by PTS on 22 December 2010. When providing the reasons for its decision, the PTS referred to Chapter 3, Section 23 of the Swedish Electronic Communications Act (2003:389) wherein certain requirements must be satisfied to permit such an acquisition.
Aside from formal requirements for the acquiring company, such an acquisition must not adversely affect competition in the relevant market or lead to a different use of the radio frequencies. In addition, if any special reason occurs the application may be dismissed. PTS concluded that no circumstances existed in the instant case which implied that the transfer would lead to a change in the use of the frequencies or that any special reasons for dismissal were present.
Regarding the issue of competition in the 2.6 GHz band market, Hi3G would receive almost twice as high a frequency volume than its competitors following the acquisition - 70 MHz compared to the competitors with 40 MHz each. Given that the total amount of spectrum an operator could be allocated during the selection procedure was determined to be a maximum of 140 MHz, and the market concentration, with an increase of 20%, was not considerable, the PTS considered that the acquisition would not adversely affect market competition.
How the exact definition of the "market" should be determined was not made clear in the decision. The PTS does not preclude that the market definition could be broader than 2.6 GHz. A possible range could, in view of the conditions for similar services, consist of a frequency band between 1-3 GHz. In the decision, it was pointed out that the frequency allocation subject to the spectrum in this manner was more balanced between the competitors.