Ofcom statement on Annual Licence Fees for 900MHz and 1800MHz spectrum

Ofcom has published a statement setting out the revised annual licence fees for 900MHz and 1800MHz spectrum.  Licences for this spectrum have been issued with an indefinite term and are subject to payment of annual licence fees.  Ofcom has been directed by the Government to revise these annual fees to reflect the full market value of the spectrum concerned, in particular taking into account the prices achieved in the recent 4G auction for similar spectrum.

Following extensive analysis and consultation, Ofcom has concluded that mobile operators should pay a combined annual total of £80.3m for the 900 MHz band, and £119.3m for the 1800 MHz band.  The new fees come into effect in two phases: one half of the fees increase, from the current to the new rates, will come into effect on 31 October 2015.  The second half will come into effect on 31 October 2016, with full fees payable annually from that point.

DotEcon advised Ofcom in the revision of these fees. For the initial consultation, we prepared two reports:

  • A report on the results of the additional spectrum method (ASM) and the linear reference price method (LRP) applied to the bids submitted in the UK 4G auction; and
  • An international benchmarking study providing evidence on spectrum prices achieved in auctions of comparable spectrum in other jurisdictions.

We have advised Ofcom on both of these aspects in the preparation of the second consultation taking into account comments from stakeholders on the initial proposals.  Following the second consultation, we again assisted Ofcom in its analysis of responses from stakeholders.

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