{"id":42502,"date":"2025-07-18T08:07:59","date_gmt":"2025-07-18T07:07:59","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=42502"},"modified":"2025-07-18T08:07:59","modified_gmt":"2025-07-18T07:07:59","slug":"ofcom-cuts-uk-mobile-licence-fees-for-900mhz-and-1800mhz-by-gbp60m","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2025\/07\/ofcom-cuts-uk-mobile-licence-fees-for-900mhz-and-1800mhz-by-gbp60m.html","title":{"rendered":"Ofcom Cuts UK Mobile Licence Fees for 900MHz and 1800MHz by GBP60m"},"content":{"rendered":"

After much debate, the UK telecoms regulator has today agreed to reduce the total amount paid by the primary mobile network operators – EE<\/a>, O2<\/a> and Vodafone<\/a> \/ Three UK<\/a> – to use the 900MHz, 1800MHz and 2100MHz radio spectrum bands by around \u00a360m per year. The bands support the use of 2G and 4G<\/a> mobile (mobile broadband) services.<\/p>\n

The cost of Annual Licence Fees<\/strong> (ALF) remains a highly divisive subject for the mobile operators, which often complain that hikes in this area can mean price rises for consumers and less investment going toward their networks. The cost of such fees can, however, be influenced by various different factors, such as the ongoing removal of 3G<\/a> services and the desire to make modern 5G services available via the same bands etc. Not to mention any changes in the supply and demand conditions since the fees were set.<\/p>\n

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

In case anybody has forgotten, Ofcom<\/a>, which was prompted by evidence submitted via BT<\/a>, has been investigating a \u201cmaterial misalignment between our fees and the underlying market value of the relevant spectrum<\/em>\u201d since early 2024. Back in December 2024 this resulted in a proposal to reduce the ALFs for the 900MHz<\/strong> and 1800MHz<\/strong> bands by 21% (here<\/a>), while fees for the 2100MHz<\/strong> band would increase by 12%.<\/p>\n

The mobile operators were clearly unhappy with Ofcom<\/a>’s approach and several complained of errors in their calculations, as evidenced through feedback published in April 2025 (here<\/a>). But the good news today is that the regulator’s final decision has updated the calculation and indicated that operators will now save an estimated combined total of \u00a360m a year (up from the prior proposal of \u00a340m).<\/p>\n

Ofcom’s ALF Decision<\/strong><\/p>\n

We have decided to revise the ALFs we charge for mobile spectrum as follows:<\/p>\n

\u2022 For 900 MHz spectrum, we will reduce the ALFs to \u00a31.032m per MHz (a 26% reduction from current levels).<\/p>\n

\u2022 For 1800 MHz spectrum, we will reduce ALFs to \u00a30.760m per MHz (also a 26% reduction from current levels).<\/p>\n

\u2022 For 2100 MHz spectrum, we will increase ALFs to \u00a30.722m per MHz (a 6% increase from current levels).<\/p>\n

Overall, this will reduce the total ALFs that MNOs pay from around \u00a3325m to around \u00a3265m, a reduction of 18%.<\/p>\n

These changes to ALFs give effect to the proposals set out in our December 2024 consultation, with modifications to:<\/p>\n

\u2022 reduce the lump sum values (\u201cLSVs\u201d) we consulted on by 5% to account for a potential modest reduction in spectrum values since the last two UK auctions, and to ensure that we set LSVs conservatively; and<\/p>\n

\u2022 reduce the annualisation rate from 6.38% to 6.33%, primarily to reflect an updated view on the inflation risk premium and inflation expectations.<\/p>\n

In addition, as we proposed in our February 2025 consultation, we have decided to:<\/p>\n

\u2022 allow the MNOs to pay ALFs in 12, rather than 10, monthly instalments; and<\/p>\n

\u2022 change the date on which fees for the 2100 MHz spectrum become due, to align with the date on which fees become due for 900 and 1800 MHz spectrum.<\/p><\/blockquote>\n

Ofcom hopes to ensure that “spectrum is used efficiently<\/em>” by aiming to set their ALFs based on an estimate of the forward-looking market value of the spectrum in each of the bands, although some mobile operators like Three UK<\/a> still think the whole concept of ALFs should be \u201cabolished<\/em>\u201d (here<\/a>). But for now it appears as if the regulator intends to continue with the above approach.<\/p>\n

“While the amount of money saved by each mobile network operator will vary because they hold different amounts of spectrum in each of these bands, all operators will benefit from these changes, strengthening their ability to invest in the UK. We will make the Regulations that will give effect to our decisions later this year<\/strong><\/em>,” said Ofcom’s statement.<\/p>\n

Separately, the regulator has today opened a new consultation<\/a> on amending the Mobile Trading Regulations. The proposed change would remove the requirement that mobile network operators pay all instalments of their ALFs before trading spectrum they hold. This would remove a potential barrier to spectrum trading, which could encourage efficient use of spectrum. The consultation will remain open for responses until 12th Sept 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"

After much debate, the UK telecoms regulator has today agreed to reduce the total amount paid by the primary mobile network operators – EE, O2 and Vodafone \/ Three UK – to use the 900MHz, 1800MHz and 2100MHz radio spectrum bands by around \u00a360m per year. The bands support the use of 2G and 4G […]<\/p>\n","protected":false},"author":1,"featured_media":29483,"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-42502","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\/114872981221205714","error":""},"yoast_head":"\nOfcom Cuts UK Mobile Licence Fees for 900MHz and 1800MHz by GBP60m - ISPreview UK<\/title>\n<meta name=\"description\" content=\"After much debate, the UK telecoms regulator has today agreed to reduce the total amount paid by the primary mobile network operators - EE, O2 and\" \/>\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\/2025\/07\/ofcom-cuts-uk-mobile-licence-fees-for-900mhz-and-1800mhz-by-gbp60m.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ofcom Cuts UK Mobile Licence Fees for 900MHz and 1800MHz by GBP60m - 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