Ofcom ups UK network license fees to £200 million

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UK regulator Ofcom has tripled the license fees for the country’s mobile operators to £199.6 million.

EE, O2, Three and Vodafone will now pay a combined annual total of £80.3 million (€109 million) for the country’s 900MHz band and £119.3 million (€162 million) for the 1800MHz band.

Despite the revised fees coming in at 13 percent lower than earlier Ofcom proposals, they represent a sharp increase from the current £64.4 million payable by telcos.

Ofcom said the revision reflected “full market value” and took into account recent spectrum auctions overseas, such as the one held in Germany over the summer.

The new fees will be introduced in two phases. Prices will begin to rise from 31 October this year and will be in full effect by the end of October 2016.

Following the changes, EE will pay a total of £75 million per year for 900MHz and 1800 MHz spectrum, up from the £24.9 million paid currently.

Vodafone and O2 will each pay £49.8 million, up from £15.6 million, while Three’s bill will rise to £25 million, up from the £8.3 million.

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

Ofcom was ordered by the UK Government to revise the fees paid for mobile spectrum in 2010.

Kester Mann, Principal Analyst at CCS Insight, said: “Operators will inevitably protest at the large hike in fees and are likely to warn that investment in networks and services will be impacted as a result. However, the reality is that this is a pill the providers are going to have to swallow. 

“In one of Europe’s most competitive markets, they have no choice but to continue to make improvements to coverage and capacity and have little margin to adjust pricing to compensate.”