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Ofcom considering increasing 4G mobile operator license fees, could affect users

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Ofcom has just published a consultation that outlines how 4G mobile operator licensing fees could increase in the future.

The UK’s office of communications could drastically raise the annual feeds for the 900MHz and 1800MHz 4G spectrum bands following a consultation.

After calculating the value of the spectrum based on the bids made during the 4G auction and the payments received for each, Ofcom is proposing that the annual licensing fees are increased to bring the costs more in line with the true value.

However, the proposed fees are radically different to those currently being paid by the four UK 4G network providers (or soon-to-be providers).

“Mobile network operators currently pay a combined total of £24.8 million per year for 900MHz spectrum and £39.7 million for 1800MHz spectrum,” reads the Ofcom proposal. “This [consultation] has produced revised proposed total fees payable by mobile network operators of £138.5 million per year for 900MHz spectrum and £170 million for 1800MHz spectrum.”

EE, the longest running UK 4G provider, currently pays a £24.9 million combined fee for the 900MHz and 1800MHz spectrum. This could be raised to £107.1 million, a little over four times larger than the existing annual figure.

Vodafone could be paying £83.1 million next year, rather than its current £15.6 million payment and O2 could face the same payment jump for its 4G network licensing fees.

Hutchinson 3G, owner of Three, could see its £8.3 million annual figure rise to £35.7 million next year.

Daunting figures aside, the price hikes could affect consumers in that 4G tariffs could become a lot more expensive.

Networks could face increases to what they pay to run mobile voice calls, 3G and 4G services, which would also affect normal 3G network contract prices too.

Ofcom’s consultation period will end on December 19 and if the proposals are accepted, the new prices would come into effect next year.

Next, read why Three is the best choice for 4G despite starting late.

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