Customers face paying four times more for 4G services in proposed price hikes

An Ofcom consultation suggests fees paid by mobile phone networks could quadruple
  • @kashmiragander

Consumer groups are concerned that a proposed 400 per cent rise in the fee mobile networks are charged for offering 4G could be loaded onto their customers.

Ofcom has published a consultation that could see the fees paid by mobile network providers quadruple for the 900 MHz and 1800 MHz spectrums that are used for voice calls, 3G and some 4G services.

An industry expert from uSwitch, Adam Kirby, said: "The size of these figures may come as bad news to the mobile networks, but more worryingly could sound alarm bells for consumers. Our concern is that it will be mobile users who are left to foot the bill -- and it isn’t clear if there will be any direct benefits to them."

The proposals could see 02 and Vodafone’s fee to run super-fast 4G services climb to £83.1m from £15.6m, with Three’s fee tripling to £35.7m from £8.3m. EE, the first firm to introduce facility to customers, would see its rates skyrocket from £24.9m to £107.1m.

The increased fees could allow the UK Treasury to raise an additional £250m a year, with officials stating that the raise is simply intended to reflect market values in Europe.

The price hikes are not currently guaranteed but are likely to come into effect next year according to Ofcom, and it is likely network suppliers will resist the changes before the consultation closes on 19 December 2013.

The increases have been described by mobile operators as "excessive" with Vodafone commenting that "the regulator should be encouraging such private sector investment in infrastructure and new services like 4G, which will benefit consumers, businesses and the wider British economy for many years to come."

The current spectrum pricing dates back to the mid-1980s and 1990s when 2G mobile connections were standard. The proposed changes are intended to reflect the increased value of the spectrum as 2G connections have been replaced by faster 3G and 4G networks. Prices were last increased in 2000.