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September 24, 2015

EE slams ‘flawed’ Ofcom spectrum fee increases

News: Ofcom has increased the annual fees for 900 MHz and 1800 MHz spectrum bands.

By Alexander Sword

Ofcom has more than tripled the annual license fees paid by mobile operators for certain parts of mobile spectrum, sparking ire from operators.

Operators will now pay a total of £199.6 million per year for both categories, an increase from the current total of £64.4 million. This represents £80.3 million for the 900 MHz band and £119.3 million for the 1800 MHz band.

Vodafone and O2 owner Telefonica will both see their fee rise from £15.6 million to £49.8 million, while EE, possessing the most spectrum, will see a rise from £24.9 million to £75 million.

Hutchinson, the owner of Three UK, will see fees rise to £25 million after spectrum is divested from EE in October.

EE criticised the increases, calling it a "flawed approach."

A spokesperson told CBR: "We think Ofcom has got this wrong.

"The trebling of fees is bad news for British consumers and business as it raises the risk that we won’t be able to offer the best prices, and invest and innovate at the pace we and our customers would like.

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"We’re also very disappointed that Ofcom has not reflected the higher costs we’ve taken on to meet enhanced coverage obligations that Ofcom and Government encouraged us to accept."

However, Kester Mann, Principal Analyst at CCS Insight, said that consumers would not suffer from the increases.

"The reality is that this is a pill the providers are going to have to swallow.

"In one of Europe’s most competitive markets, they have no choice but to continue to make improvements to coverage and capacity and have little margin to adjust pricing to compensate."

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