After a lengthy consultation period, UK communications regulator Ofcom has set new annual licence fees for spectrum used by the mobile networks and the bad news is that the new amounts to be paid by Vodafone, O2, EE and Three are over three times what they currently pay. And that could be bad news for customers of those networks too.
Customers of other, smaller networks, such as Tesco Mobile, could also face rising bills as those operators rent bandwidth from the majors and will also, therefore, find their fees multiplying.
Ofcom was instructed by the UK government to look into the annual spectrum licence fees for the 900MHz and 1800MHz bands which are used for 2G, 3G and, crucially, 4G services. It was tasked to bring the fees in line with those charged in other European nations - also taking into account the recent spectrum auction in Germany in June.
It found that the fees paid by networks currently are a fraction of their "market value" so has adjusted them going forward.
The networks were accumulatively paying £64.4 million a year to use the 900MHz and 1800MHz spectrum bands. From October 31, they will have to pay £199.6 million. And with their fees being increased so dramatically, it is possible that consumer mobile bills will also rise.
Ofcom however suggests that network operators could swallow the extra costs in a bid to remain competitive. It also claims that the networks knew about the rising fees for years so has had ample time to prepare.
"Mobile operators have a strong incentive to invest in networks and to keep prices competitive. The operators have had five years’ notice that the fees would be increased to reflect full market value and we expect them to have budgeted for this," an Ofcom spokesperson told Pocket-lint.
"We’ve listened carefully to the arguments and evidence put forward by industry. The fees announced today are in line with analysts’ expectations and with the amounts that operators pay for accessing spectrum in other countries."
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