Britain’s telecommunications regulator Ofcom has agreed to review the fees it charges mobile network operators including BT Group PLC (LSE:BT.A) to use mobile spectrum bands.
BT has been pressuring Ofcom to review annual fees on the 900 megahertz (MHz), 1800 MHz and 2100 MHz frequency ranges since March, when it wrote to the regulator to request a review.
“We have now considered BT’s request, and we consider that the evidence suggests that a fee review is justified,” Ofcom said in a statement published on Tuesday.
“Annual licence fees (ALFs) are fees we charge mobile network operators to use certain spectrum bands,” Ofcom explained, adding: “They typically come into effect after a mobile operator’s licence won at auction has come to the end of the initial licence period.
“The fees are designed to ensure that the spectrum is used efficiently.”
Spectrum fees for the 2,100 frequency band were last set in December 2021, when Ofcom set the price at £561,000 per MHz.
BT, through its mobile subsidiary EE, owns 40 MHz of this spectrum, suggesting its ALF is in the ballpark of £22 million.
Ofcom last changed its ALFs on the 900 MHz and 1,800 MHz spectrums in 2018, setting them at £1.093 million and £805,000 per MHz, respectively.
Lower frequency bands are more expensive because they allow for wider coverage, particularly in rural and suburban areas as lower frequencies can travel longer distances and penetrate buildings better.
BT owns 90 MHz of the 1,800 MHz frequency band, putting its ALF for this band above £72 million.
Vodafone, Telefónica, H3G and Virgin Media O2 are the other main purchasers of mobile network bandwidth.
Ofcom said it will detail its initial findings in the review “by the end of this calendar year”.