By Ian Walker
LONDON--The U.K. Office of Communications, or Ofcom, said
Thursday that annual license fees payable by mobile network
operators should be cut by 10% to 223 million pounds ($340.24
million) a year, as it believes they will incur higher costs to
meet their new coverage obligations.
EE, H3G, Telefonica and Vodafone agreed with the U.K. government
last December to provide geographic voice coverage across 90% of
the U.K. landmass by the end of 2017, and this was implemented
through a variation of the mobile network operators' licences in
January.
Ofcom said its initial view is that while there could be
incremental costs incurred by the mobile operators in meeting the
coverage obligation, it is unlikely to have a material effect on
the market value of the spectrum.
However, the regulator said it is open to considering
alternative views before reaching a final decision. It has
therefore published a consultation on the matter which closes on
April 17. Ofcom will then make a final decision on the revised
annual licence fees, which are likely to come into effect later
this year, it said.
The Government directed Ofcom in 2010 to revise fees paid for
the 900 MHz and 1800 MHz spectrum bands to reflect full market
value, after completion of the 4G auction in February 2013. The two
bands are used to provide voice and data services using a mix of
2G, 3G and 4G technologies.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749