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Thursday, September 24, 2015

Ofcom trebles the annual licence fee for UK mobile networks

UK communications regulator Ofcom has decided that the annual mobile fees for mobile operators will treble, following a government direction that the fees should reflect ‘full market value’.

Ofcom has concluded that mobile operators should pay a combined annual total of £199.6m per year for the 900MHz and 1800MHz spectrum bands, which are used for 2G, 3G and 4G voice and data services.

The figure is 13% lower than Ofcom’s earlier proposals in February but more than three times the current fee. Half of the increase will be payable from 31st October 2015; the second phase will be effective a year later.

Philip Marnick, Ofcom’s Group Director of Spectrum, said “We have listened carefully to the arguments and evidence put forward by industry, and conducted a complex and comprehensive analysis to determine the new fees. The mobile industry has not previously had to pay market value for access to this spectrum, which is a valuable and finite resource, and the new fees reflect that value.”

Dan Howdle from consumer mobile and broadband advice site said "There can be absolutely no doubt as to the fairness of simply ensuring the UK's mobile network providers pay a fair price for what is absolutely a finite resource. But, of course, the money has to come from somewhere. And while, on paper, O2, Vodafone, Three and EE appear in arguably rude health from the perspective of their announced operating profits earlier this year, behind closed doors they are unlikely be happy to see their war chest diminished. That Ofcom is 'phasing in' the move to a yearly lump-sum payment for the licence fees will make it especially difficult to detect when, if and how these costs will be passed on to consumers, either directly or indirectly via the fees paid by mobile virtual network operators (MVNOs) such as Virgin Mobile and giffagaff to piggyback their network infrastructure."

[Ofcom statement]

Author: The Fonecast
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