{"id":40374,"date":"2024-12-13T08:17:47","date_gmt":"2024-12-13T08:17:47","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=40374"},"modified":"2024-12-13T08:17:47","modified_gmt":"2024-12-13T08:17:47","slug":"ofcom-uk-propose-to-cut-mobile-licence-fees-for-900mhz-and-1800mhz-by-gbp40m","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/12\/ofcom-uk-propose-to-cut-mobile-licence-fees-for-900mhz-and-1800mhz-by-gbp40m.html","title":{"rendered":"Ofcom UK Propose to Cut Mobile Licence Fees for 900MHz and 1800MHz by GBP40m"},"content":{"rendered":"

The UK telecoms regulator has today proposed, following evidence submitted by BT<\/a> (EE<\/a>), to reduce the total amount paid by the mobile network operators to use the 900MHz, 1800MHz and 2100MHz radio spectrum bands – used to support 2G, 3G<\/a> and 4G<\/a> mobile (mobile broadband) services – by around \u00a340m per year.<\/p>\n

The cost of Annual Licence Fees<\/strong> (ALF) is often a highly divisive subject for the likes of EE<\/a>, Vodafone<\/a>, Three UK<\/a> and O2<\/a>. Mobile operators often complain that hikes in this area can mean price rises for consumers and less investment going toward their networks. The horrifically overpriced 3G<\/a> auction that netted a staggering \u00a322bn in 2000, but which also hobbled the roll-out and network investment in related services, is just one such example.<\/p>\n

NOTE:<\/strong> The ALFs for these bands previously totalled around \u00a3320m per annum and are paid to HM Treasury.<\/div>\n

In recent years, Ofcom<\/a> and the Government have worked somewhat more effectively to address the issue of spectrum pricing, although some grumbles will always exist. But the cost of such licence fees can also be influenced by other factors, such as the ongoing removal of 3G<\/a> services, as well as the desire to make modern 5G<\/a> services available via the same bands.<\/p>\n

At the start of 2024 the regulator signalled that they would investigate if there was “sufficient evidence of a possible material misalignment between our fees and the underlying market value of the relevant spectrum<\/em>“. BT<\/a> then promptly provided evidence to support their claim of a material misalignment with the fees charged for the 1800MHz band (i.e. 1800MHz fees 49% higher than 2.1GHz), which also highlighted other changes, such as in supply and demand conditions since the fees were set. Ofcom<\/a> then opened a review of this in July 2024 (here<\/a>) and has today proposed the following changes.<\/p>\n

Ofcom<\/a> Statement<\/strong><\/p>\n

In our review, we considered submissions from the mobile network operators, used evidence from recent spectrum auctions in the UK and internationally, and applied our method for calculating the fees. We are therefore now proposing the following changes:<\/p>\n

\u27a4 <\/b>reduce the ALFs for 900 MHz spectrum to \u00a31.097m per MHz (a 21% reduction);<\/p>\n

\u27a4 reduce ALFs for 1800 MHz spectrum to \u00a30.81m per MHz (also a 21% reduction); and<\/p>\n

\u27a4 increase ALFs for 2100 MHz spectrum to \u00a30.766m per MHz (a 12% increase).<\/p>\n

As a result of these changes, the total amount paid by the mobile network operators to use these spectrum bands would reduce by around \u00a340m per year, with each of the operators seeing a reduction in the total amount they pay. The amount of the reduction varies by operator because they hold different amounts of spectrum in each of the bands.<\/p><\/blockquote>\n

The savings involved in this change are unlikely to have much of an impact on end-user pricing, but any reduction is sure to be welcomed by the operators (except perhaps those that hold more of the 2100MHz spectrum than the other bands). Ofcom’s related consultation<\/a> will remain open for feedback until 7th March 2025 and the regulator then aims to publish a final statement during summer 2025<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The UK telecoms regulator has today proposed, following evidence submitted by BT (EE), to reduce the total amount paid by the mobile network operators to use the 900MHz, 1800MHz and 2100MHz radio spectrum bands – used to support 2G, 3G and 4G mobile (mobile broadband) services – by around \u00a340m per year.<\/p>\n","protected":false},"author":1,"featured_media":37247,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[61,406,474,405,60,32,36,63,475,96],"class_list":["post-40374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-4g","tag-5g","tag-bt","tag-ee","tag-mobile-broadband","tag-o2","tag-ofcom-regulation","tag-three-uk","tag-virgin-media","tag-vodafone"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/113644533720453028","error":""},"yoast_head":"\nOfcom UK Propose to Cut Mobile Licence Fees for 900MHz and 1800MHz by GBP40m - 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