Skip to main content
Insight

Ofcom consultation on mobile spectrum licence fees

Ofcom has recently conducted research which shows that UK consumers now believe that the ability to obtain emergency assistance, contact friends and family, access information, education and Ofcom has recently conducted research which shows that UK consumers now believe that the ability to obtain emergency assistance, contact friends and family, access information, education and entertainment make the provision of mobile telecommunications essential services. This demonstrates how access to voice services and mobile internet has become central to the way we live and work in the 21st Century.

Today, Ofcom has published its latest consultation document in relation to the revision of the annual licence fees for the use by mobile network operators ("MNOs") of the 900MHz and 1900MHz bands of the electromagnetic spectrum. The bands are currently used for the delivery of 2G, 3G, and 4G mobile services. This review arises out of Ofcom's mandate, imposed by the Government, to ensure that the annual licence fees reflect full market value following completion of the 4G auction.

MNOs currently pay a total of £24.8m per year for spectrum in the 900MHz band, and £39.7m for spectrum in the 1800MHz band. The revised figures currently proposed are £109.3m per year for spectrum in the 900MHz band, and £137.5m for spectrum in the 1800MHz band - an average increase of around 394%.

This is, however, around 29% lower than Ofcom's previous proposal in October 2013, and reflects its updated analysis of the market value of the 800MHz and 2.6GHz spectra; international benchmark evidence; and calculations to convert lump-sum values into annual licence fees. The calculation also takes into account the anticipated co-existence costs in relation to avoiding unwanted interference with digital terrestrial television broadcast signals. The reduction from the last proposal is partly as a result of proposals made by certain of the MNOs (such as EE and H3G) as to calculation methods.

As part of the consultation, Ofcom has calculated what it believes to be the market values of the 800MHz and 2.6GHz spectra, and has valued spectrum within those bands at £32.63m/MHz and £5.5m/MHz (although it acknowledged that the latter figure may undervalue the spectrum band by up to £900k/Mhz).

The closing date for response to the consultation is 26th September 2014.

 

In other news, Ofcom has also invited applications for new local television channels in a further seven locations: Aberdeen; Ayr; Carlisle; Dundee; Forth Valley; Inverness; and Stoke-on-Trent. Local television is currently broadcast in the same spectrum bands as the national channels, typically in the range between 470MHz and 790MHz (albeit with the upcoming clearance exercise channels at the top end of this range are intended to be moved to frequencies below 694MHz). These will join the other locations for which licences have been granted, being: Basingstoke; Belfast; Birmingham; Brighton & Hove; Bristol; Cambridge; Cardiff; Edinburgh; Glasgow; Grimsby; Guildford; London; Leeds; Liverpool; Manchester; Maidstone; Middlesbrough; Mold; Newcastle; Norwich; Nottingham; Oxford; Preston; Reading; Salisbury; Scarborough; Sheffield; Southampton; Swansea; and York.

Sign up to our email digest

Click to subscribe or manage your email preferences.

SUBSCRIBE