The telecoms regulator Ofcom has revealed that the prices it charges mobile phone networks to use airwaves space or spectrum – is rising from £64.4m to £199.6m a year. Although Ofcom have defended the increase saying that it reflects the value of spectrum, operators have already warned that it could have a knock on effect for consumers.
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Even though this rise is slightly less than the £228.3m Ofcom had previously said it would charge in February, Vodafone, O2, EE and Three are all set to pay up to three times what they pay now for the 2G, 3G and 4G networks. For the technically minded, these fees are paid annually for the right to use the 900MHz and 1800MHz spectrum bands that are used for mobile phone signals.
Plans similar to this were first discussed by Ofcom in 2010, when the coalition Government asked the telecoms regulator to introduce market rates for bandwidth use. After being met with strong opposition from mobile operators, Ofcom were forced to review their original plans in 2014. The regulator have justified this current price rise by saying that providers have had five years’ warning to budget for this increase and therefore shouldn’t need to pass any extra costs onto their customers.
With that said though, Vodafone and O2 are set to see their fees more than triple from £15.6 million a year to £49.8 million, while EE’s will rise from £24.9 million to £75 million and Three’s will jump up from £8.3 million to £25 million. The variation in the amount companies are set to pay is due to the bandwidth they use.
Will our mobile phone bills rise?
The new fees will be introduced by the end of October 2016, and will take around a year to take full effect. EE, the largest network provider has already suggested that it won’t be able to continue offering ‘the best prices’ due to this recent change.
Vodafone have said that they will be reviewing Ofcom’s proposed spectrum fees to see how this will affect their costs, as they’ve already invested £1 billion on their network this past year. Other network providers haven’t denied that they may have to increase fees due to this additional charge. Mobile operators have previously argued that increased rise in charges for spectrum could result in higher bills for customers and stop faster 4G networks from being introduced across the country.
As a customer, the only thing you can do is wait for more news to filter through around this issue. But it may be worth having a look at your budget – or you could create one if you haven’t already – and seeing whether you’d be able to afford an increase on what you currently pay for your mobile phone bill, so that any additional charges won’t come out of the blue.