Operators could have their licence fees for spectrum use more than quadrupled under new proposals from Ofcom.
Vodafone was the first operator to attack the plans, saying it was disappointed to pay more fees in addition to what it is investing in its network. EE swiftly followed suit, calling the measures 'excessive'. The proposals relate to the 900MHz and 1800MHz holdings of Britain's four operators, with the spectrum largely used for voice calls and some 4G services. The government told Ofcom in 2010 to reexamine the licence fees so they reflect market values.
The new fees have been based on the outcome to this year's 4G auction, the prices paid in overseas markets and commercial characteristics of the spectrum. Under the plans, operators will pay a total of £309m, compared to £64.4m now. Both O2 and Vodafone face licence fee increases of 430%, because of their larger holdings at 900MHz.
A Vodafone spokesman 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. Vodafone UK is spending more than £900m this year alone on its network and has pledged to bring indoor 4G coverage to 98% of the UK population by 2015. 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.'
An EE spokesperson said: 'EE will engage in Ofcom's consultation process and reflect our view that there must be a balance between licence fees and the critical 4G network investment consumers and businesses are demanding to drive growth and jobs for the UK economy. The proposed increase in licence fees is excessive at a time when we are investing heavily in the roll out of 4G.'
A Three spokesman added: 'We welcome Ofcom’s move to reflect the market value of legacy spectrum holdings, but the proposals fail to recognise the relative value of high and low frequency spectrum, despite evidence from around the world. The sums proposed by Ofcom over-value high frequency spectrum.'
The consultation will close on 19 December 2013. O2 has yet to give its reaction to the plans.
Author: Graeme Neill