Ofcom Revise Mobile Spectrum Licensing

News Article - Tuesday, 15 October 2013 09:42

By: Kerry Butters Category: Connectivity

Telecoms regulator Ofcom has published a consultation on revising the licensing fees for the mobile spectrum bands used for voice calls, 3G and 4G service used by network operators in the UK. The 900 MHz and 1800 MHz spectrum bands are to rise to "reflect full market value”, Ofcom said in an announcement.

The government directed the regulator to revise fees in late 2010 and said that Ofcom should pay particular attention to the spectrum used by 4G, which was sold off in an auction earlier this year. According to Ofcom , prices will rise as the technology is a valuable and finite resource which can be incentivised by charging for it.

At the moment, network operators pay a combined total of £24.8m per year for the 900 MHz spectrum and £39.7m for the 1800 Mhz. In order to come to a decision about pricing, Ofcom looked at three key areas: the sums paid in the 4G auction, a comparison of pricing overseas for the same technology and the technical and commercial aspects of the UK bands.

This means that operators will now have to pay a total of £138.5m and £170.4m respectively. This is then broken down depending on how much of the spectrum each network uses. EE will pay the most under the proposed pricing structure at £107.1m, with O2 and Vodafone both expected to pay £83.1m and HG3 a total of £35.7m.

It's thought that the changes will come into effect next year and the consultation is due to end just before Christmas this year on 19 December.

It's unknown what impact this will have on the market in general, or whether the changes, which are significant, will affect 4G pricing for businesses and consumers.

Yesterday, news broke that Vodafone has signed up more than 100,000 customers to its recently launched 4G service, despite it being only 7 weeks since the company launched the superfast mobile broadband. This means that Vodafone is already matching EE's sign up rate, even though they launched the service almost a year earlier.

"We’re giving people a reason to get excited about ultrafast 4G and more than 100,000 have already joined in”, said Guy Laurence , Chief Executive of Vodafone UK. "We’ve been switching on a new site in the London area every half an hour and now people in more than 80 towns and districts can enjoy Vodafone ultrafast 4G.”

EE said recently that it has signed up over 1 million customers since launching 4G 10 months ago. However, Vodafone claims that its service is six times that of 3G and has pledged to extend its coverage to reach 98% of UK premises by 2015, even when used indoors.

EE has been criticised in the past for its high prices coupled with low data quotas, Vodafone is obviously going some way to compete as they are offering plans starting from £26 per month with 6GB of data alongside 6 months free subscriptions to Spotify Premium or Sky Sports Mobile TV with its Red 4G tariffs.

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