Ofcom Propose Annual Licence Fees for the 2100MHz Mobile Band

The UK telecoms and media regulator, Ofcom, has today published its proposals on the annual licence fees for spectrum licences in the 2100MHz band, which was originally auctioned off in April 2000 to support the deployment of 3G mobile (mobile broadband) networks for the eye watering sum of £22.5 billion.

The original auction applied a fixed licence term of 20 years, to deliver 3G services. The licences, which are currently held by EE (BT), Vodafone, O2 (VMO2) and Three UK, include both paired and unpaired spectrum. But in 2011, and following a UK Government direction, Ofcom varied the terms of these licences to make them indefinite and to require the payment of annual licence fees from 1st January 2022.

The UK Government direction requires Ofcom to set annual licence fees that reflect the full market value of the spectrum, which is what the regulator has today attempted to deliver. We should point out that in 2013 the 2100MHz band was extended for us alongside faster 4G networks (here), which operators like EE have already adopted.

Ofcom’s Statement

We propose:

• that, whilst the paired and unpaired spectrum will both be useable for the deployment of mobile services on a forward-looking basis, they have different technical characteristics which mean that they will not necessarily have the same market value;

• to set an annual licence fee of £0.567m per MHz for paired 2100 MHz spectrum and £0.290m per MHz for unpaired 2100 MHz spectrum; and

• that the annual licence fees would apply from 1st January 2022, with an option to pay across ten equal monthly instalments.

Ofcom aims to publish their decision and fee regulations by the end of 2021. We are currently seeking the views of mobile operators and will report back on that later.

UPDATE 4:47pm

At the time of writing most operators would only say that they’re still studying Ofcom’s proposals and are not yet ready to comment.