Three’s efforts to drive down a 37% cap on the amount of mobile spectrum any operator could own was rejected at the Court of Appeal.
The decision hands the communications regulator a free run at launching the radio spectrum sale in April.
We welcome this decision, and will now press ahead with releasing these important airwaves
Ofcom said: “The Court of Appeal has very firmly rejected Three’s application for permission to appeal on all grounds.
“We welcome this decision, and will now press ahead with releasing these important airwaves.
“This new capacity will allow mobile companies to offer more reliable reception, and to prepare for future 5G services.”
Ofcom revealed the rules for the mobile spectrum auction in July as it looked to meet the insatiable demand for data from UK smartphone users.
The telecoms regulator said the auction would support 5G mobile and increase the available airwaves for mobile devices by a third.
Three argued that the process would hamper competition by allowing Vodafone, BT and O2 to claim too much of the mobile spectrum.
EE and Three both lost separate High Court cases in December, with BT’s EE challenging the cap for being too rigid and Three claiming it was too generous.
Three, which is owned by the Hong Kong conglomerate CK Hutchison, was the only operator to pursue the case at the Court of Appeal.
In a statement, Three said it was disappointed by the outcome, but stood by its decision to appeal.
It said: “Our appeal is about competition in the UK mobile market and spectrum distribution is the single biggest factor in maintaining a competitive market.
“The court process has helped provide clarity on whether there is a genuine 37% cap and, thanks to the hearings, Ofcom is now much clearer that a 37% cap is the level they believe is appropriate to maintain competitive balance.
“We still believe that a 37% cap is too high if the policy objective is to have a competitive four player market and we would like to see it set at a lower level in the future.”
BT/EE holds 45% of all usable mobile spectrum, while Three owns around 12%.
Mobile network operator O2, which controls around 15% of all usable spectrum, said: “We welcome today’s decision to reject Three’s appeal. It is now imperative that we move forward and hold the auction as soon as possible.”