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Ofcom licence fee revision: “the consumer will pay.”

Today’s news that Ofcom, the independent regulator and competition authority for the UK communications industries, has published a consultation concerning the revision of annual licence fees for the 900 MHz and 1800 MHz spectrum bands (currently used by mobile network operators) has been met coolly by analysts.

“Ultimately the consumer will pay,” says Mark Newman, Chief Research Officer, Informa, “either in the form of higher prices or reduced network quality. It is no coincidence that the UK operators paid some of the highest prices in Europe for their 3G spectrum and we suffer worse network quality and coverage than mobile users in many other countries.”

These bands are used for voice calls, 3G and some 4G services.

In order to inform their estimate of the market value of licences in these two spectrum bands, Offcom say they have considered:

  • sums bid in the 4G Auction (as required by the Direction),
  • prices paid in spectrum auctions abroad, and
  • technical and commercial characteristics of spectrum bands.

 

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