Ofcom to review proposed cost increases for mobile airwaves

24 July 2014 | Kavit Majithia


Ofcom is set to review a proposed increase in costs for using airwaves to operate mobile services in the UK.

There could be as much as a five-fold increase in the costs of using airwaves in the UK, and Ofcom is likely to look into changes to annual licence fees.

Mobile operators are concerned that the hike in fees will hinder investment in the industry, with the companies arguing that increased costs for mobile services will affect the consumer.

The UK regulator published a consultation in October last year, submitting plans to raise licence fees from £65 million a year to £309 million, which will be paid to the treasury for using voice calls, 3G and some 4G services.

As a guideline, the regulator used 4G licence bidding, after the government asked Ofcom to review the prices operators paid to fully reflect the market value of mobile and TV broadcast services.

The telecoms industry hit out at the proposition, particularly because mobile service revenue is still in decline in the UK, and suggested the consumers would have to pay the price for such a rise in fees.

“Having considered the evidence submitted by respondents and updated its analysis, Ofcom intends to publish further consultation on mobile licence fees in the summer,” said an Ofcom statement.

Under the present proposals, Vodafone and O2’s fees will rise from £16 million to £83 million each, EE will pay £107 million, up from £25 million and Three would now pay £26 million, up from £8 million.