UK regulator Ofcom tones down proposed licence fee hikes

UK regulator tones down proposed licence fee hikes

01 AUG 2014

Ofcom, the UK telecoms regulator, said it reduced its proposed rise in annual licence fees for 900MHz and 1800MHz frequencies after listening to feedback from mobile operators.

When Ofcom made its original proposals in October 2013, UK mobile operators were facing a substantial increase in the total amount paid (see table), jumping from £64.4 million a year to £309 million. The mobile industry balked, saying network investment was threatened.

The revised proposal, however, still sees the total amount going up nearly fourfold to £246.8 million.

“We expected substantial responses to our initial proposals, which are based on complex analysis,” said Philip Marnick, group director of Ofcom’s spectrum group. “We’ve listened carefully to the arguments and evidence put forward during the consultation, which has helped refine our proposals.”

O2, controlled by Telefonica, told Mobile World Live that it welcomed Ofcom’s consultation process.

“Previous fee proposals would have hampered industry investment and put pressure on retail prices to the detriment of mobile phone customers,” said an O2 spokesperson. “We’ll read through the revised proposals in the coming weeks.”

Vodafone said it would review the new consultation document and continue to talk with Ofcom. Three UK said it would do the same.

“We are still reviewing Ofcom’s proposals but the new consultation goes some way to bringing proposed fees for 1800MHz spectrum closer to its real value,” a Three UK spokesperson told Mobile World Live. “We will continue to work with Ofcom to develop a licence fee process which reflects the true value of different frequencies of spectrum.”

Mobile network operators currently pay an annual combined total of £24.8 million for 900MHz spectrum and £39.7 million for 1800MHz spectrum. Under the new proposals, total fees payable on 900MHz goes up to £109.3 million per year, while the 1800MHz annual bill goes up to £137.5 million.

Ofcom hopes to have new licence fees in place next year following a consultation period on its revised proposals.

EE had still to reply to Mobile World Live at the time of writing.

Current and proposed total annual licence fees for 900MHz and 1800MHz spectrum (click image to enlarge)

Source: Ofcom


Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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