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British carriers face higher spectrum charges under new proposals

updated 07:56 am EDT, Thu October 10, 2013

Regulator Ofcom wants to raise 900MHz, 1800MHz charges by factor of four

Carriers in the United Kingdom will be forced to pay more for its spectrum, if a regulator gets its way. A consultation by Ofcom states that it hopes to increase the annual license fees for 900MHz and 1800MHz spectrum in the country, with carriers facing the prospect of paying more than four times as much for already-allocated spectrum.

The changes in pricing stem from an instruction from the British government in late 2010 to update fees to reflect the full market value of the 900MHz and 1800MHz bands, taking into account the payments for licenses in the 4G spectrum auction and prices paid by carriers for similar bandwidth abroad. At present, the networks pay a total of 24.8 million ($39.5 million) per year for the 900MHz range and 39.7 million ($63.3 million) for the 1800MHz allocations, but the proposals put these up to 138.5 million ($220.9 million) and 170.4 million ($271.8 million) per year respectively.

On a carrier-specific level, EE and sub-brands T-Mobile and Orange are hit the hardest, with the proposed fees more than quadrupling to 107.1 million ($170.8 million). Vodafone and O2 will both be expected to pay 83.1 million ($132.6 million) per year instead of the current 15.6 million ($24.9 million) they individually pay. Three will go from paying 8.3 million ($13.2 million) to 35.7 million ($57 million) under the proposals. The rates will also most likely increase every year, due to its connection to the Retail Price Index.

While it is thought that the extra charges could be passed onto the phone bills of customers, the carriers still have a chance to fight the fees. The consultation closes on December 19th, giving carriers time to reply to Ofcom's proposals and potentially lower them before they are expected to come into force next year.

by MacNN Staff



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