Thursday, September 24, 2015

Ofcom Raises Spectrum LIcense Fees About 310%

Ofcom has raised annual spectrum license fees about 310 percent for mobile operators, who collectively now pay £64.4 million, but will be paying £309.9 million under the new rules.

Total fees payable by operators will now be £199.6m per year. Half of the increase takes effect on 31 October 2015.

The second half takes effect on 31 October 2016, with full fees payable annually from that point.

In part, the fees--set to reflect market value of spectrum--reflect results of the spectrum auction in Germany.

Ultimately, the cost of such license fees and all other costs are recovered from customers, so U.K. mobile operators will have to adjust somewhere. Assuming debt service or loan obligations, dividends cannot easily be cut, U.K. mobile service providers are going to look for other ways to pay the higher license fees.

Current and revised annual licence fees for 900 MHz and 1800 MHz spectrum
All figures £m
Vodafone
Telefonica
EE*
H3G*
Total
Current
15.6
15.6
24.9
8.3
64.4
Proposed Feb 2015
62.6
62.6
77.3
25.8
228.3
Final decision
49.8
49.8
75.0
25.0
199.6

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