Ofcom wants huge 4G license fee hike, costs may be passed on to you-know-who
10th Oct 2013 | 18:11
EE, Vodafone, Three and O2 face massive fee increase
Ofcom, the UK's communications regulator, has proposed an astronomical price hike for networks using the country's radio spectrum, which in some cases would quadruple fees currently being paid.
On Thursday, the government body announced plans to cover the financial failure of this year's 4G spectrum auction, which brought in £1.2 billion less than chancellor George Osborne had envisioned.
If the plans are approved it could mean EE's licensing costs 4G services on the liberated (meaning available for 4G speeds) 900Mhz and 1800Mhz bands could jump from the current £24.9m to £107.1m.
Vodafone and O2 would face a 432 per cent increase in its fees, from £15.6m to £83.1m, while Three would see its bill raised from £8.3m to £35.7m.
The fee increase, which will undoubtedly be fought by all those affected, comes at a time when all of the four major networks are investing countless millions in upgrading their infrastructure for 4G services.
Footing the bill
However, if Ofcom is successful with its plans, it's unlikely that it'll be the likes of EE and Vodafone eating 100 per cent of the price hike. Consumer experts have warned that any up-charge would probably be passed on to smartphone users.
Adam Kirby of uSwitch.com said: "The size of these figures may come as bad news to the mobile networks, but more worryingly could sound alarm bells for consumers.
"The proposed new costs reflect a huge leap in the amount networks will have to pay the regulator for using the spectrum - our concern is that it will be consumers who are left to foot the bill."
A spokesperson for Vodafone criticised Ofcom's plans, saying it could limit the spread of 4G services around the UK.
The company said: "We are disappointed that Ofcom is proposing a 430% increase in the fees we pay for our existing spectrum at a time when we are investing more than ever in vital national digital infrastructure.
"The regulator should be encouraging such private sector investment in infrastructure and new services like 4G, which will benefit consumers, businesses and the wider British economy for many years to come."