UK telecoms regulator Ofcom has published a further consultation concerning the proposed revision of annual license fees for the 900MHz and 1,800MHz spectrum bands, according to Telegeography.com on Aug 4, 2014. With the government having previously directed the watchdog to revise the fees “to reflect full market value” once a 4G spectrum auction had been completed, Ofcom has said that its latest proposals build on earlier analysis, following consideration of responses from stakeholders.

Having considered feedback from a previous consultation, Ofcom confirmed it has updated its analysis of a number of elements, including: the bids made in the 4G auction for 800MHz and 2,600MHz spectrum; the interpretation of international benchmarks; and the calculation used to convert the total value of the spectrum into an annual fee over 20 years. As a result, it said it has reduced the overall proposed levels of fees down from its previous plans. Currently the nation’s mobile network operators pay a combined 24.8 million pounds ($41.9 million) for spectrum in the 900MHz band, while paying a total of 39.7 million pounds for 1,800MHz frequencies. However, as per the latest proposals, total fees payable for the 900MHz spectrum will rise to 109.3 million pounds per year and 137.5 million pounds for the 1,800MHz band.

On an operator-by-operator basis, the revised fee proposals will see market leader EE required to pay a total of 86.4 million pounds for its 900MHz/1,800MHz spectrum holdings (after its divestment of 1,800MHz spectrum to Hutchison 3G UK [H3G UK] to be completed in October 2015). By comparison, it currently pays 24.9 million pounds, while Ofcom’s initial proposals would have seen it pay 107.1 million pounds. Meanwhile, O2 UK and Vodafone UK both face a new annual fee of 65.8 million pounds for their respective 900MHz/1,800MHz spectrum holdings, up from the 15.6 million pounds both pay now, but down from the 83.1 million pounds proposed in October 2013. Rounding out the market, H3G UK will pay 28.8 million pounds, up from its present 8.3 million pound fee, but lower than the initial 35.7 million pound proposal. Subject to this consultation, the new annual license fees are likely to come into effect in 2015, with the consultation set to close on September 26, 2014.