Consumers could suffer from Ofcom spectrum proposal

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Industry expert claims that mobile users may be the ones paying extra after Ofcom proposed spectrum licence fee increases of up to 430 per cent

Huge increases to the price operators pay for certain spectrum fees could be passed directly to consumers, an industry analyst has warned.

Proposals by Ofcom to ramp up annual fees paid for the 900MHz and 1800MHz spectrum bands from £24.8m to £138.5m and £39.7m to £170.4m respectively should “sound alarm bells for consumers”, according to uSwitch telecoms expert Adam Kirby.

Kirby added: “The proposed new costs reflect a huge leap in the amount networks will have to pay the regulator for using the spectrum. Our concern is that it will be mobile users who are left to foot the bill – and it isn’t clear if there will be any direct benefits to them.

“In fact, providers will no doubt be concerned that their investment in network infrastructure will be limited if they are shelling out more for licence fees.”

However, with the regulator’s consultation period open until December 19, Kirby was keen to stress that there still may be changes to the proposals.

He added: “It remains to be seen how much these costs will actually rise, and if the networks can fight back and keep a lid on these increases.

“While some may argue that if the 4G spectrum had raised more, these increases wouldn’t have been so large, in fact the 4G auction benchmarked the value of mobile spectrum, so arguably helped keep these new licence fees lower than they could have been.”

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