Ofcom triples spectrum fee! Brace for your next bill

We were rejoicing back in June when it turned out that Britain offers higher 3G and 4G speeds than anywhere else in the world. Average mobile broadband speeds in UK went up by almost 27 per cent compared to the year before.

However, better service comes at a price which you will soon discover at your horror. Ofcom has raised spectrum fees for the four main operators that will now increase its revenues from the existing £64.4m to up to £200m. Most of it will go from your pocket as operators will most certainly pass on the rise in spectrum cost.

Commissioned by the Government to review spectrum costs in 2010, Ofcom has previously mulled increasing the spectrum fee by five times, but finally settled for thrice the amount after severe protests by network operators.

"The mobile industry has not previously had to pay market value for access to this spectrum, which is a valuable and finite resource, and the new fees reflect that value," says Ofcom.


In terms of the impact of Ofcom's new fee structure on regular customers, our editor has this to say:

'Every mobile phone customer knows bill shock and it is only a matter of time before they see OFCOM's fees reflected on their invoices.'

'This is inevitable because networks will be unlikely and unwilling for anything to affect their margins and will be more likely to push them to customers. Higher tariffs and less data for a higher price will be the result and rollout of 4G network will be delayed.'
'Customers can however take consolation from the fact that OFCOM is only tripling the licence fee and not increasing it five-fold as it had previously threatened to do.'

- Sunetra Chakravarti, Mobile Choice


To be implemented in two phases by October of next year, the Telegraph says that because of Ofcom's new rules, "Vodafone and O2 will see their fees more than triple from £15.6m a year to £49.6m. EE’s charges will rise from £24.9m to £75m, while Three’s bill will go from £8.3m to £25m.”

With such a hike, cost of using mobile broadband will soon go up several notches and Ofcom's customer satisfaction survey, which measured overall satisfaction levels at 73 per cent for mobile broadband customers last December, will surely see the numbers taking a plunge come 2016.

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