EE, Three, O2, Vodafone face 400 per cent 4G fee hike
EE, Three, O2 and Vodafone face quadrupled 4G costs, but experts warn we might be the ones who end up paying.
If you've ever had a shocking phone bill, you might be glad to hear the shoe's on the other foot: but experts warn that if EE, Three, O2 and Vodafone face quadrupled 4G costs we might be the ones who end up paying.
Telecoms watchdog Ofcom proposes increased fees for the the 900 MHz and 1800 MHz spectrum bands, used for 2G, 3G and some 4g services, in an attempt to make up for the disappointing amount raised when 4G airwaves were auctioned off.
If Ofcom has its way, Vodafone and O2's 4G fee to run super-fast 4G services will climb to £83.1m from £15.6m, a whopping 432 per cent increase. And Three's fee will more than triple to £35.7m from £8.3m.
As Britain's first and widest-reaching 4G network, EE's fee would also triple to an eye-watering £107.1m from the current £24.9m.
"The size of these figures may come as bad news to the mobile networks, but more worryingly could sound alarm bells for consumers," says industry expert Adam Kirby of uSwitch. "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 knock-on effect of the higher fees may not be limited to higher prices: if forced to fork out more to the regulator, networks won't have as much money to invest in infrastructure, which could affect future 4G plans.
At this stage, the fee hikes aren't confirmed, as Ofcom is still consulting on the amounts. The networks will no doubt resist the changes, which look to try and recoup some of the shortfall when the 4G spectrum auction raised much less than expected. Controversially, Chancellor of the Exchequer George Osborne factored an expected £3.5bn 4G cash into his budget before the auction had actually taken place, leaving him with egg on his face when the auction raised just £2.3bn -- a shortfall of £1.2bn. Slow handclap for George.
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