Ofcom talks up mobile price falls following criticism of plan to hike 2G spectrum fees

Ofcom said the average cost of communications has fallen during its 10-year tenure as the UK telecoms regulator, in what could be read as an attempt to rebuff fierce criticism by mobile operators over a proposed hike in spectrum costs they say could be passed on to consumers.

The regulator said the average cost of mobile services in the UK has more than halved between 2003 – the year Ofcom began regulating communications services – and 2012, despite rapid expansion in the capability and use of mobile phones during the period. The typical mobile service cost £12.87 (€15.61/$21.32) in 2012, compared to £39.65 in 2003, but total household spend on mobile services grew from £12.3 billion to £14.8 billion over the same period.

Ofcom said 51 per cent of the UK population use a smartphone, and total mobile phone penetration stands at 92 per cent. Mobile voice volumes have more than doubled in the 10 years from 2003, and SMS volumes increased from 24 billion in 2003 to 170 billion in 2012.

The regulator added that only Italy beats the UK in terms of the average cost of a low use mobile package, in research by Teligen covering Western European countries and the US. The UK ranks third behind Italy and Germany in a high-end scenario covering costs for an affluent, two-person household.

Ofcom's references to delivering value to consumers come less than a week after a leading analyst company joined a chorus of criticism from mobile operators regarding the regulator's plans for a fivefold increase in the the cost of 2G and 3G spectrum.

Enders Analysis last week said Ofcom's plan to increase combined operator fees for 900 MHz spectrum from £24.8 million (€30 million/$41 million) per year at present to £138.5 million per year, and 1800 MHz prices from a combined £39.7 million to £170.4 million, would be akin to imposing a one off tax of £4.5 billion on the industry over 20 years.

The company warned the UK risked deterring future investment by presenting itself as a harsh regulatory environment.

Ofcom is currently considering proposals for spectrum pricing following a consultation that ran to Dec. 19.

For more:
- see this Ofcom report

Related Articles:
UK operators face 'one-off tax of £4.5B' under Ofcom 2G spectrum fee plans
Ofcom threatens fivefold increase in UK spectrum fees starting in 2014
UK LTE auction comes under spotlight over weak return
Analysys Mason: What the UK spectrum auction bid data reveals

 

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