more free coffee and sausage rolls?
Vodafone, O2, Three and EE have won a case against Ofcom claiming that the UK comms regulator's increase in spectrum fees was unfair. The ruling could result in a £220m rebate for UK mobile providers. The verdict relates to annual licence fees for mobile spectrum use coughed to Ofcom by the firms between 2015 and 2017. Four …
So if your provider were, say, to ignore EU roaming rules and illegally charge you £220 extra for your usage whilst on holiday, and the court then ordered them to repay you, you'd want the government to legislate to add that £220 to your next year's contract?
I've been more than 20 years with my mobile phone provider. That's because they've always treated me fairly and given me no cause to walk away, so why take on the hassle, and expose myself to the risk of finding myself in a much worse situation?
But if they ever illegally charged me £220 extra, I know I have a range of other options. Whereas Ofcom has monopoly powers against them. Spot the difference?
Surly what you wanted to say was something more like:
My mobile provider is excellent. They provide a brilliant service and have never let me down. I couldn't ask for more....
.....but if they came in here, asking me for an extra 220 quid, for no good reason, I'd say "Oi! Teleco, Noooooo!'
That's not the same
If your mobile phone provider charged you £200 and you challenged it because you thouht they should have charged you £100 and then you go to court and win, you would expect to pay the £100, which was the legitimate price. You wouldn't expect to get away with no charges at all.
(From the FT comments:)
The article lacks a bit of context. All the 3G, 4G and now 5G spectrum has been auctioned. The 3G auction raised £22.4 billion, 4G auction raised £2.3B and the 5G auction (part 1) raised £1.3 billion. It is a nice little Treasury racket as the price of spectrum is now so high that no new network entry is feasible, as we saw in the 5G auction. The 5G spectrum at 3.4 GHz fetched £7.38m per MHz - the same spectrum was sold in 2003 for £175,000 a MHz.
In general the spectrum cost is treated as a capital asset and when spectrum prices go too high, as they did with 3G, the mobile operators directly cut back on the extent of network they initially roll out...one of the reasons 3G coverage was so awful for so long. It is one of the reasons why 5G coverage may be a while reaching you.
The 2G spectrum at 900 MHz was given to the Vodafone and Cellnet free in 1987 in exchange for them investing in the GSM networks early (they had only just rolled out their 1G networks). This led, as a matter of fairness, to the new competitors at 1800 MHz getting their spectrum free. The auction fees in dispute relate to this 900 MHz and 1800 MHz spectrum, where the mobile operators are required to pay an annual fee based upon a market value, which Ofcom guesstimates. What upset the mobile operators was when Ofcom, acting as the spectrum branch of the Inland Revenue, suddenly jacked the price up. There is no purpose to spectrum pricing than a tax by any other name.
Interesting repercussions there, too.
The cost of that 3G spectrum was a whopping loss for the telcos, so they carried it forward and offset it against tax liabilities in subsequent years. Result: the telco whose tax affairs are most visible - on account of them being domiciled in Blighty - ended up with a reputation for paying no tax, and a target for protest.
Ofcom guilty of overcharging - oh dear.
Feels like a conflict of interest that the regulator should be in charge of the spectrum sale in the first place.
Perhaps this is why the MNO’s skimp on coverage out of town. Perhaps give the 5G spectrum away for free - as historically for Cellnet and Racal-Vodac - and regulate on coverage..... nah it’s a racket for government with free lolly so thought not.
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