Vodafone and Telefonica O2 were winners as the UK regulator revised its February 2015 proposal for licence fees, but number one player EE was less happy.

The UK’s four operators will now be charged a total of £199.6 million annually, a 12.5 per cent reduction from the £228.3 million previously proposed.

However, the new fees are a threefold increase over the current charges of £64.4 million, marking a steep increase in what the country’s four operators pay for 900MHz and 1.8GHz frequencies.

The new fees came into effect in two phases. One half of the increase will come into effect on 31 October 2015; the second half will come on 31 October 2016.

Both Vodafone and O2 benefited from a revision in Ofcom’s February 2015 proposals. Each will now pay £49.8 million, compared with the earlier proposal of £62.6 million.

EE will now pay £75 million, a slight decrease from £77.3 million. H3G will pay £25 million, compared with £25.8 million.

But EE, the UK’s largest operator, was not happy. “We think Ofcom has got this wrong. The proposed licence fees for 1800MHz spectrum are based on a flawed approach,” it said.

“The trebling of fees is bad news for British consumers and business as it raises the risk that we won’t be able to offer the best prices, and invest and innovate at the pace we and our customers would like,” it added.

EE also said the new fees did not reflect the higher costs it had taken on to meet coverage obligations.

In explaining why it reduced its February 2015 proposal, the watchdog looked at the operators’ deal with the UK government to provide 90 per cent voice coverage, but “concluded it did not have a material effect on the market value”.

But Ofcom did benchmark internationally, taking particular account of the German spectrum auction, which concluded in June this year.

The final fees for 1.8 GHz are three per cent lower than earlier this year, reflecting Ofcom reducing the discount rate used to convert a lump-sum value (of the kind paid by licensees when they acquire spectrum in an auction) into an annual payment.

There was also an additional factor in the case of 900 MHz, where fees are 24 per cent lower than the regulator’s earlier proposal. The significant drop in 900 MHz fees seems to be the result of a comparison with the German auction, a high-rolling affair but one driven primarily by aggressive bids for 1800MHz allocations.

Ofcom noted in a recent report on the German auction that 900 MHz sold at a “significantly lower price” than 1.8 GHz, an outcome it had not observed in other countries in its database.