British Mobile Services Providers Face Fee Hike

[DreamTheater]

According to media reports, British mobile network operators may face a 4-fold increase in license fees to rent the radio spectrum. These plans were revealed by Ofcom.

 

The watchdog confirmed that the new fees were in line with what other states paid. Moreover, the group believed that the UK operators had been getting off lightly for a long time. The United Kingdom raised a less-than-expected £2.34 billion in a 4G spectrum auction for airwaves in order to carry high-speed mobile broadband traffic, so it seems that Ofcom is looking to make up the shortfall.

 

The largest broadband providers Vodafone, Telefonica’s O2, EE and H3G pay around £64.5 million pounds altogether for using the 900 megahertz and 1800 megahertz spectrum bands. It was estimated that any changes would result in a £309 million increase.

 

According to Ofcom, spectrum is a valuable and finite national resource, and that is why charging for it might incentivize the optimal use of frequencies. In the meantime, the telcos can blame the UK government for the rent hike. Apparently, the government asked the watchdog to recalculate the fees to reflect “full market valueâ€, and the latter said the new rules were expected to take effect in 2014 after a consultation period which will end in December.

 

The mobile companies keep reviewing the new bill, but Vodafone has already expressed its discontent after Ofcom was proposing a 430% increase in its fees. Maybe it believes that the regulator should be encouraging such private sector investment in infrastructure and new services – for example, 4G.