Higher bills likely as Ofcom reveals plans to hike spectrum fees

Higher bills likely as Ofcom reveals plans to hike spectrum fees

UK networks are warning that consumers may face mobile bill hikes after industry regulator Ofcom revealed plans to sharply increase its spectrum fees.

Ofcom announced on Thursday it plans to increase the fees it charges EE, Vodafone, O2 and Three for using the airwaves by between 330% and 433%.

That's considerably more than networks were expecting, though a jump in fees had been seen as likely in the wake of the Government's spectrum auction earlier this year having yielded less than expected.

The adjusted prices, which Ofcom claims “reflect full market value”, will see O2 and Vodafone each pay £83.1m per year (a 433% increase), EE charged £107,1m and Three £35.7 (both 330% up). All told the treasury will be £245m a year better off as a result.

The proposals will now enter a period of consultation over the coming weeks, and not surprisingly, industry sources canvassed by The Telegraph predict likely implications will include charging customers extra to use mobile services as well as potentially reduced investment in expanding 4G infrastructure to rural areas.

“We are disappointed that Ofcom is proposing a 430pc increase in the fees we pay for spectrum at a time when we are investing more than ever in vital national digital infrastructure,” Vodafone said on the record.

“The regulator should be encouraging such private sector investment in infrastructure and new services like 4G, which will benefit consumers, businesses and the wider British economy for many years to come.”

EE – the UK's pioneering 4G network – not surprisingly was singing a similar tune. “The proposed increase in licence fees is excessive at a time when the industry need to invest heavily in the roll out of 4G.”

Of course, that would be private industry. For the Government and its regulating bodies, what's of far greater relevance is the fact that the 4G auction brought in £2.3bn rather than the budgeted £3.5bn. In that light they're probably thinking they're letting the networks off lightly.

It takes a lot for us to actually sympathise with the plight of the UK's far-from-struggling mobile networks, but hearing this almost gets us there – almost.

Read more about: 3 MobileEEO2Vodafone

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