{"id":29538,"date":"2021-12-13T11:40:00","date_gmt":"2021-12-13T11:40:00","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=29538"},"modified":"2021-12-13T11:49:07","modified_gmt":"2021-12-13T11:49:07","slug":"mobile-operators-unhappy-as-ofcom-set-licence-fees-for-2100mhz","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/12\/mobile-operators-unhappy-as-ofcom-set-licence-fees-for-2100mhz.html","title":{"rendered":"Mobile Operators Unhappy as Ofcom Set Licence Fees for 2100MHz"},"content":{"rendered":"

The UK telecoms regulator has today set new annual licence fees (ALF) for spectrum licences in the 2100MHz band, which was originally auctioned off in April 2000 to support the rollout of 3G<\/a> mobile (mobile broadband) networks for the eye watering sum of \u00a322.5bn. But mobile operators aren’t happy about the change.<\/p>\n

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

\"2100MHz_Spectrum_Holdings_UK_July_2021\"<\/div>\n

The UK Government direction requires Ofcom<\/a> to set annual licence fees that reflect the full market value of the spectrum, which is what the regulator, after an initial consultation (here<\/a>), are now attempting to deliver. We should point out that in 2013 the 2100MHz band was extended for use alongside faster 4G<\/a> networks (here<\/a>), which operators like EE<\/a> have already adopted.<\/p>\n

However, most mobile operators gave an unhappy response to Ofcom<\/a>’s proposal (a government Directive). For example, BT<\/a> called it “disproportionate and unjustified<\/em>“, while Three UK<\/a> felt it was “inappropriate<\/em>” and warned that Ofcom had “significantly overestimated the UK value of the 2100MHz paired spectrum<\/em>.”<\/p>\n

Mobile operators generally questioned the validity of ALFs, as well as how their values had been calculated, and warned that excessive fees could inhibit the trading of spectrum. Vodafone<\/a> said it was “questionable how long Ofcom\u2019s approach to setting ALFs can be sustained<\/em>” because “the process is reliant on comparing auction outcomes that will become increasingly historic.<\/em>”<\/p>\n

Nevertheless, following consultation, Ofcom has now set an annual licence fee of \u00a30.561m per MHz for “paired<\/em>” 2100MHz spectrum (slightly lower than the \u00a30.567m per MHz originally proposed).<\/p>\n

Ofcom’s Statement<\/strong><\/p>\n

We consider that setting fees for the paired 2100 MHz spectrum which reflect the market value (opportunity cost) of the underlying spectrum is consistent with our statutory duties, including our duty to secure the optimal use of the spectrum. It is also in line with our general policy on spectrum pricing as well as the Government Direction.<\/p>\n

On unpaired spectrum, further to consultation responses, we plan to consult further in the first half of 2022 on the future use of the band, including on a proposal to revoke the unpaired licences and therefore are not setting a fee in this statement.<\/p><\/blockquote>\n

All of this means that, based on their current paired 2100MHz spectrum holdings (and based on April 2021 prices), the mobile operators will be required to pay the following annual licence fees (the full fees will now become payable from the fee payment date of 4th January 2022<\/strong>):<\/p>\n

EE<\/a>: \u00a322,440,000
\nVMO2: \u00a311,220,000
\nThree UK<\/a>: \u00a316,549,500
\nVodafone<\/a>: \u00a316,605,600<\/p><\/blockquote>\n

However, the regulator intends to consult further on the “unpaired<\/em>” 2100MHz spectrum (they originally suggested an ALF of \u00a30.290m per MHz for this), which will take place during the first half of 2022. Ofcom noted that there were currently “no plans for incumbents to deploy [using the unpaired band] in the foreseeable future<\/em>,” which is “due to economic viability<\/em>.”<\/p>\n

We note that there were various issues around the viability of deploying higher powered mobile services in the unpaired 2100MHz spectrum, such as the fact that current licence conditions do not permit high power mobile use, as well as limited available bandwidth and compatibility with the adjacent paired 2100MHz spectrum, and the lack of an equipment ecosystem. So some of the operators’ concerns have been heard.<\/p>\n","protected":false},"excerpt":{"rendered":"

The UK telecoms regulator has today set new annual licence fees (ALF) for spectrum licences in the 2100MHz band, which was originally auctioned off in April 2000 to support the rollout of 3G mobile (mobile broadband) networks for the eye watering sum of \u00a322.5bn. But mobile operators aren’t happy about the change.<\/p>\n","protected":false},"author":1,"featured_media":25376,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[62,61,405,60,32,36,63,96],"class_list":["post-29538","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-3g","tag-4g","tag-ee","tag-mobile-broadband","tag-o2","tag-ofcom-regulation","tag-three-uk","tag-vodafone"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nMobile Operators Unhappy as Ofcom Set Licence Fees for 2100MHz - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The UK telecoms regulator has today set new annual licence fees (ALF) for spectrum licences in the 2100MHz band, which was originally auctioned off in\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2021\/12\/mobile-operators-unhappy-as-ofcom-set-licence-fees-for-2100mhz.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mobile Operators Unhappy as Ofcom Set Licence Fees for 2100MHz - 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