Ofcom to review mobile network operator licence fees after BT request
- BT has asked Ofcom to look into the fees charged for using the 1800MHz spectrum
- Ofcom charges companies a licence fee for using three spectrum bands
Ofcom plans to review the annual licence fees it charges mobile network operators (MNOs) for using mobile spectrum bands.
The reason for this is a request from telecom giant BT, which asked the regulator in March to look into the fees charged for using the 1800MHz spectrum.
The media regulator currently charges licence fees to companies including EE, Vodafone and O2 for the use of three spectrum bands: 900 MHz, 1800 MHz and 2100 MHz.
Investigation: Ofcom plans to review the annual licence fees it charges mobile network operators (MNOs) for using mobile spectrum bands
Ofcom says they are designed to ensure spectrum is used efficiently, but MNOs often complain they reduce returns through higher operating costs.
They further argue that the costs are hampering investment in key projects such as standalone 5G networks, which MNOs have already launched in several countries, including Spain, South Korea and the United States.
A report by Mobile UK, the trade association for mobile network operators, published in July 2023, found that mobile network operators collectively paid Ā£204 million in annual licence fees in 2021 and more than Ā£292 million the following year.
Two alternatives to mobile spectrum pricing have been proposed which the company says will help the UK government achieve its goals set out in its Wireless Infrastructure Strategy to expand 4G and 5G coverage.
One of these is free licensing, where Ofcom does not charge any fees above the original amounts paid for spectrum.
The other option is targeted tariff reduction, which Mobile UK says would minimise the disruptive impact of licensing fees.
Ofcom said it expected to consult on the initial findings by the end of 2024 and that it would āwelcome any additional evidence that stakeholders feel could assist us with this investigationā.
The regulator’s announcement comes a day after it fined BT Ā£17.5m for failings when its emergency calling service suffered a major outage last year.
BT, which operates the 999 system, was hit by a network outage on 25 June 2023 that lasted more than ten hours and resulted in almost 14,000 failed call attempts.
Ofcom’s investigation found that the FTSE 100 company did not have adequate warning systems and procedures in place to identify the extent and cause of the incident and take action.
In addition, it was found that BT’s disaster recovery platform did not have the ‘capacity and functionality to meet reasonably foreseeable demand’.
This left people with hearing and speech impairments unable to make phone calls, putting them at greater risk of harm.
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