The proposed revisions would see ALFs for 900 MHz and 1800 MHz spectrums reduced by 21% to £1.097 million per MHz and £0.81 million per MHz, respectively.
Ofcom is also considering reducing 2100 MHz spectrum ALFs by 12% to £0.766 million per MHz.
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Ofcom's decision to review annual licence fees focuses on ensuring fees that mobile network operators pay for spectrum usage accurately reflect its market value.
Typically, operators pay fees for using specific spectrum bands after the initial licence period, around 20 years, ends. Ofcom is looking into whether it can promote efficient spectrum use by encouraging operators to keep only the spectrum they value most — if an operator cannot justify the cost, they may return or trade the spectrum.
The proposed price revisions aim to reflect forward-looking market values, with industry stakeholders encouraged to have their say on the changes, with the regulator open to further review and adjustments.
Back in March, BT/EE requested a review of fees for the 1800 MHz band, contending they were too high compared to other bands and reflected outdated market conditions.
Following the operator’s submission, Ofcom said it now seeks to review what it charges operators to use the three mobile spectrum bands to ensure costs encourage both optimal use of licences as well as more investment and innovation in the UK’s telco sector.
“The net effect of our proposed changes is that the total amount the mobile network operators pay to use these mobile spectrum bands would reduce by around £40 million per year, with each of the MNOs seeing a reduction in the total payment amount they pay,” the regulator said.
Interested stakeholders can submit responses to the proposed changes using this form by no later than 5 pm March 7 2025.
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