At the Government’s request, we have undertaken a review of our market based approach to allocating mobile spectrum licenses.
Our review considered a broad range of information, including:
- the potential alternatives and international experience in allocating and charging for mobile spectrum
- our past Annual Licence Fee (‘ALFs’) decisions
- historical spectrum trades as well as responses to the related consultations on these topics
We've also had regard to emerging approaches in allocating and charging for spectrum using third party international spectrum research and input from the mobile operators and their advisors.
Current ALFs were set recently, in 2018 and 2021. A revision of the precise levels of specific ALFs was outside the scope of this review because there is already an existing, separate, process for considering this. If there is sufficient evidence of a possible material misalignment between our fees and the underlying market value of the relevant spectrum, we will review the precise levels of ALFs. We welcome further engagement with the operators if there is new evidence on the market value of the spectrum that would support a misalignment review.
We retain an open mind and flexibility on the best approaches to meet our various duties, and will continue to consider, on a case-by-case basis, whether fixed term licences, indefinite licences, or other approaches are appropriate when we award licences for mobile spectrum.
The document below is our response to the Government's request, sent to the Secretary of State for Science, Innovation and Technology on 21st December 2023.
Response to Government
Review of Ofcom's market-based approach to mobile spectrum management (PDF, 596.6 KB)
Ofcom is today launching a review of the annual licence fees we charge mobile network operators for use of three mobile spectrum bands (900 MHz, 1800 MHz and 2100 MHz).
Annual licence fees (ALFs) are fees we charge mobile network operators to use certain spectrum bands. 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. We currently charge ALFs for three mobile spectrum bands (900 MHz, 1800 MHz and 2100 MHz).
On 28 March 2024, BT wrote to Ofcom to request a review of the ALFs we charge for 1800 MHz spectrum. We have now considered BT’s request, and we consider that the evidence suggests that a fee review is justified. As a result of the commonalities in the formula we use to set ALFs, we have decided to begin a review of all of the ALFs we currently charge (that is, ALFs for 900 MHz, 1800 MHz and 2100 MHz spectrum).
We expect to consult on our initial findings by the end of this calendar year. We welcome any additional evidence which stakeholders consider would assist us in this review.