Mobile phone bills set to soar as Ofcom triples operators' annual fees

UK TELECOMS REGULATOR Ofcom has announced it is to treble annual fees for operators, which means your mobile phone bill could be about to get more expensive.

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

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."

While this figure is 13 percent lower than the figure Ofcom proposed back in February, which would have seen operators paying a combined £228m per year, it is more than three times the current fee.

The hike will see EE's fees rise from £24.9m annually to £75m, O2 and Vodafone's charges from £15.6m a year to £49.6m, and Three's will from £8.3m to £25m.

This decision by Ofcom, unsurprisingly, hasn't gone down well with operators, who have suggested that the increase in costs could see a rise in consumers' mobile phone bills. 

An EE spokesperson told The INQUIRER: "We think Ofcom has got this wrong. The proposed licence fees for 1800MHz spectrum are based on a flawed approach.

"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.

"We're also very disappointed that Ofcom has not reflected the higher costs we've taken on to meet enhanced coverage obligations that Ofcom and government encouraged us to accept."

Vodafone is also pretty miffed, saying: "We will be reviewing Ofcom's proposed spectrum fees over the coming days as they represent a significant increase when we are already investing around £1 billion on our network and services this year."

We asked Ofcom to comment, and it was quick to argue that the price increase in fees shouldn't necessarily be felt by the consumer. 

“Mobile operators have a strong incentive to invest in networks and to keep prices competitive," a spokesperson said. "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.

"The fees announced today are in line with analysts' expectations and with the amounts that operators pay for accessing spectrum in other countries."

Ofcom has said that the increase in costs will come into effect in two stages. One-half of the fees increase, from the current to the new rates, will come into effect on October 31, while the full fees will come into force a year later. µ

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• Cellular
• Mobile