Mobile phone bills set for massive rise

Fury as industry regulator trebles network costs

MILLIONS of mobile phone customers could f ace higher monthly bills after the industry regulator trebled the f ees it charges operators.

The largest network provider, EE, has already indicated it will not be able to offer ‘the best prices’ as a result.

Others did not deny that they could decide to increase charges.

But Ofcom said providers had five years’ warning to budget for the increase and should not need to pass on the cost.

The regulator said yesterday mobile phone companies must pay a combined total of just under £200million a year to use the network. Although the figure is 13 per cent lower than the regulator’s initial proposal in February, it is more than three times the £64.4million currently paid.

The fees apply to the 900MHz and 1800MHz spectrum bands – used for 2G, 3G and 4G voice and data services – and will vary for each operator depending on the bandwidth they use. EE, which runs EE, T-Mobile and Orange, said Ofcom had ‘got this wrong’ and the fee change was based on a ‘flawed approach’.

A spokesman for the company said: ‘The trebling of fees is bad news for British consumers and businesses as it raises the risk that we won’t be able to offer the best prices, and invest and innovate at the pace we and our customers would like.’

EE said it was ‘disappointed’ Ofcom had not taken into account the higher costs providers took on after agreeing to Government proposals to improve coverage.

Other providers did not rule out rises. Asked whether it would increase charges following the change, an O2 spokesman said: ‘We’re examining the decision in detail before deciding how best to proceed.’ A Vodafone spokesman said: ‘We will be reviewing Ofcom’s proposed spectrum fees … they represent a significant increase when we are already investing £1billion on our network and services this year.’ Three other providers refused to comment.

Ofcom denied the claim consumers could end up with higher bills. ‘The operators have had five years’ notice. We expect them to have budgeted for this,’ a spokesman said. ‘ The fees are in line with analysts’ expectations and with the amounts that operators pay for accessing spectrum in other countries.’

However, David Hickson, of the Fair Telecoms Campaign, said: ‘Ofcom have arguments for saying there is no good reason why [the cost] should be passed on. But it seems as likely as one plus one making two that the mobile phone operators are going to pass this on.’

Steve Nowottny, of MoneySavingExpert. com, said: ‘While this is a significant increase, it would be hugely disappointing if providers were to hit users with a steep hike in prices . Consumers facing bigger bills are liable to vote with their feet.’