LONDON Jan 23 Telecom operators in Britain may
rein in spending on high-speed 4G networks if the country
presses ahead with a plan to quadruple the cost of renting
airwaves, mobile phone industry group GSMA said on Thursday.
Regulator Ofcom outlined the plan in October after the UK
government said the fees should reflect "full market value".
The proposal also came after Britain raised a
less-than-expected 2.34 billion pounds ($3.7 billion) in a 4G
spectrum auction for airwaves to carry high-speed mobile
Internet traffic earlier last year.
"The GSMA is concerned that Ofcom's proposal to more than
quadruple annual licence fees ... will jeopardise mobile
operators' ability to upgrade their networks for 4G services in
the UK," GSMA's chief regulatory officer Tom Phillips said.
Ofcom wants to hike charges for the 900MHz band to 138.5
million pounds ($229.7 million) from 24.8 million pounds, and to
170.4 million pounds from 39.7 million pounds for 1800MHz.
Europe has lagged the United States and parts of Asia in
rolling out superfast mobile broadband, in part because spectrum
has only recently become available for the services.
Britain's Vodafone, for one, is planning big
increases in capital expenditure on upgrading its networks in
Britain and elsewhere.
Vodafone said on Thursday its own analysis indicated the
proposed fees were more than double where they should be.
"Vodafone UK is spending more than 900 million pounds this
year alone on its network and has pledged to bring indoor 4G
coverage to 98 percent of the UK population by 2015," a
"The regulator should be encouraging 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."
Ofcom said it had not yet made a final decision on the level
of the fees.
"We are currently consulting on this, and we will consider
all responses with an open mind before making our decision later
this year," it said.
Espirito Santo analyst Robert Grindle said that while the
proposed fees were "somewhat based on the market price," mobile
operators did have a point.
"The returns are relatively low in UK mobile and the
operators to some extent will be squeezed by this," he said.