The telecommunications watchdog Ofcom has recently demanded more money to be paid by UK networks EE, Three, Vodafone and O2 for the rental of the radio spectrum used for 4G.
The watchdog is now expected to demand more than 4 times the amount of money it had originally agreed upon to rent out the radio bands. Under the proposed changes, EE’s 4G costs will increase from £24.9m per year to £107.1m per year, with other networks seeing other huge rises in costs.
Alarmingly, this extra cost may be passed onto consumers in the form of more expensive phone contracts, less generous 4G data allowances, or heftier roaming charges. Other effects could include less development in the UK phone industry including a slowing down of the 4G rollout (which is currently nowhere near complete) as networks lack the money to reinvest in infrastructure.
According to Ofcom the move comes not as a measure to recoup some of the £1.2 billion shortfall experienced when the government overestimated the amount that would be raised from the 4G auction, but as a reflection of the true value of radio frequencies owned by telecoms companies which were purchased for relatively small sums before the introduction of 3G. The value of these radio spectrum bands has increased significantly, and the introduction of new technologies such as 4G and digital TV have meant there is less of the radio spectrum to go around.
Ofcom’s plans have not been finalised, but if they do get the go ahead it is fairly certain that these extra costs will be passed onto consumers in one form or another.