{"id":8720,"date":"2015-02-19T08:03:25","date_gmt":"2015-02-19T08:03:25","guid":{"rendered":"http:\/\/www.ispreview.co.uk\/?p=8720"},"modified":"2015-02-19T08:03:25","modified_gmt":"2015-02-19T08:03:25","slug":"big-change-unlikely-as-ofcom-consult-on-uk-mobile-operator-licence-fee-hike","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2015\/02\/big-change-unlikely-as-ofcom-consult-on-uk-mobile-operator-licence-fee-hike.html","title":{"rendered":"Big Change Unlikely as Ofcom Consult on UK Mobile Operator Licence Fee Hike"},"content":{"rendered":"<p>The national telecoms regulator has today carried out its promise to once again review the plans for a massive hike in annual licence fees on the 900MHz and 1800MHz radio spectrum bands, but they&#8217;ve also been quick to warn that the recent coverage agreement between mobile operators and the Government is &#8220;<em>unlikely to have a material effect<\/em>&#8220;.<\/p>\n<p><!--more--><\/p>\n<p>The situation stems from the fact that the Government had already directed <a class=\"shortlink shortlink-133 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\" rel=\"\" title=\"ofcom\" data-chref=\"https:\/\/www.ofcom.org.uk\">Ofcom<\/a> in 2010 to revise the fees &#8220;<em>to reflect full market value, after the completion of the <a class=\"shortlink shortlink-116 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/4g\" target=\"_blank\" rel=\"\" title=\"4g\" data-chref=\"https:\/\/www.ispreview.co.uk\/broadband_mobile.php\">4G<\/a> auction<\/em>&#8220;. At the time mobile operators were paying a combined total of just \u00a324.8m per year for the <strong>900MHz<\/strong> band and \u00a339.7m for <strong>1800MHz<\/strong>, although <a class=\"shortlink shortlink-133 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\" rel=\"\" title=\"ofcom\" data-chref=\"https:\/\/www.ofcom.org.uk\">Ofcom<\/a>&#8217;s initial proposal said this should be hiked to \u00a3138.5m and \u00a3170.4m respectively.<\/p>\n<p>Needless to say the operators were not happy and some, such as <a class=\"shortlink shortlink-43\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/eebroadband\" target=\"_blank\" rel=\"nofollow\" title=\"ee home broadband\">EE<\/a>, warned that the move would slow their deployments of superfast 4G (LTE) connectivity. In response Ofcom reviewed their decision and in August 2014 updated their analysis, which resulted in a mild cost reduction (<a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2014\/08\/ofcom-re-examine-huge-uk-mobile-operator-licence-fee-hike.html\" target=\"_blank\">here<\/a>), but some operators were still unhappy.<\/p>\n<p>Since then the Government and mobile operators, including <a class=\"shortlink shortlink-80\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/threeuk\" target=\"_blank\" rel=\"nofollow\" title=\"three uk\">Three UK<\/a>, <a class=\"shortlink shortlink-90\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/vodafoneuk\" target=\"_blank\" rel=\"nofollow\" title=\"vodafone\">Vodafone<\/a>, <a class=\"shortlink shortlink-43\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/eebroadband\" target=\"_blank\" rel=\"nofollow\" title=\"ee home broadband\">EE<\/a> and <a class=\"shortlink shortlink-68\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/o2uk\" target=\"_blank\" rel=\"nofollow\" title=\"o2\">O2<\/a>, have reached a separate agreement (<a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2014\/12\/uk-mobile-operators-agree-5bn-deal-extend-geographic-coverage-90.html\" target=\"_blank\">here<\/a>) that will see mobile voice (2G) coverage being extended across 90% of the United Kingdom\u2019s landmass by the end of 2017 and mobile data coverage (<a class=\"shortlink shortlink-115 shortlink-chref\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/3g\" target=\"_blank\" rel=\"\" title=\"3g\" data-chref=\"https:\/\/www.ispreview.co.uk\/broadband_mobile.php\">3G<\/a> and 4G) will also be extended to 85%.<\/p>\n<p>Part of that new agreement involved requiring Ofcom to look again at their proposal, not least with regards to balancing the licence fee hike against the new coverage obligation for a possible cost reduction. But today&#8217;s <a href=\"http:\/\/stakeholders.ofcom.org.uk\/consultations\/annual-licence-fees-further-consultation\/\" target=\"_blank\">provisional decision<\/a> would see total fees payable by operators of<strong> \u00a3223m per year<\/strong>, which is just 10% lower than Ofcom\u2019s earlier proposal.<\/p>\n<p>The change factors a reduction in the discount rate that Ofcom considers to be appropriate when converting a &#8220;<em>lump-sum value<\/em>&#8221; (of the type paid by licensees when they acquire a licence in an auction) into an equivalent annual payment and a reduction in the assessment of the market value of the 1800MHz band (expressed as a lump-sum value).<\/p>\n<div align=\"center\"><img decoding=\"async\" class=\"ngg-singlepic ngg-none\" src=\"http:\/\/www.ispreview.co.uk\/wp-content\/gallery\/2015-article-illustrations\/ofcom_mobile_licence_fees_feb_2015_proposal.gif\" alt=\"ofcom_mobile_licence_fees_feb_2015_proposal\" \/><\/div>\n<p>Crucially today&#8217;s decision has not yet considered the impact of the new coverage obligation and that&#8217;s the primary reason for this consultation, which is set to run until <strong>17th April 2015<\/strong>.<\/p>\n<p>Never the less Ofcom&#8217;s &#8220;<em>initial view<\/em>&#8221; is that the incremental costs incurred by the operators in meeting the new obligation probably won&#8217;t have a &#8220;<em>material effect on the market value of the spectrum<\/em>&#8220;, although the regulator said they are open to &#8220;<em>alternative views<\/em>&#8220;.<\/p>\n<p>Meanwhile the mobile operators will perhaps be hoping for something more significant from Ofcom.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The national telecoms regulator has today carried out its promise to once again review the plans for a massive hike in annual licence fees on the 900MHz and 1800MHz radio spectrum bands, but they&#8217;ve also been quick to warn that the recent coverage agreement between mobile operators and the Government is &#8220;unlikely to have a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[62,61,405,60,32,36,38,63,96],"class_list":["post-8720","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-3g","tag-4g","tag-ee","tag-mobile-broadband","tag-o2","tag-ofcom-regulation","tag-politics","tag-three-uk","tag-vodafone"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - 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