Ofcom set to charge mobile networks up to five times more for certain spectrum

Ofcom has today released a consultation, that if agreed, will see mobile network's annual fees for certain spectrum hiked by up to four times, in a move that could see costs passed on to consumers.

The consultation deals with 900 MHz and 1800 MHz licence fees, for which Ofcom, under direction from the government, argues the current fees paid are out of date, and not in keeping with international norms.

"The Direction requires Ofcom, after completion of the 4G Auction, to revise the 900 MHz and 1800 MHz licence fees so that they reflect the full market value of the frequencies in those bands, and also requires that in revising them we must have particular regard to the sums bid for licences in the 4G Auction," the report explains.

Under the plans EE will have the biggest updated bill, with its annual fees increasing from £24.9 million to £107.1 million. This is due to the firm holding the majority of its 4G services on 1800 MHz, after repurposing the spectrum before the 4G auction, which sold off 800 MHz and 2.6 GHz.

Both Vodafone and Telefonica (O2), which run their 3G services on the 900 MHz and 1800 MHz spectrum, will also have their annual fees seriously hiked, rising over five time, from £15.6 million to £ 83.1 million.

Three, which will be running some of its 4G services on the bandwidth when it launches LTE at the end of the year, will have its costs upped from £8.3 million to £35.7 million. The fees equate to £1.99 million per MHz on 900 and £1.19 million per MHz on 1800, reflecting the functionality of the bandwidth.

The consultation period closes on 19 December, after which Ofcom plans to speedily impose the new levies. "We do not propose to phase in fees. Licensees have known since December 2010 that fees would be revised to reflect full market value," the regulator stated.

Ofcom believes "the revised fees can be implemented in a single step without having an adverse impact on services delivered to customers." Although services may not be affected, consumers must now wait to see if the increases will be reflected in their monthly bill.