Mobile operator EE has hit out at government plans to hike the costs of spectrum licences in the UK by 330 percent, claiming the rise will hamper its ability to roll out services in more remote regions.
Telecoms regulator Ofcom said last month that it is considering raising the price that the UK’s operators – EE, O2, Three and Vodafone – will have to pay for spectrum use. EE faces the biggest rise of £82m as part of the total increase to all operators of £245m.
However, the firm’s chief executive Olaf Swantee told V3 that such a huge increase could hinder the firm’s ability to roll out its network. Swantee cited the upgrade of its network in Cumbria as the sort of work that could be hampered by this issue.
“That amount of money, that we would have to spend extra every year, is 80 times what we have done here [in Cumbria]. If the annual licence fee is increased that will not take place,” he said.
Swantee also criticised the current Electronic Communications Code (ECC), which governs the relationship between operators and site owners, as being woefully out of date.
“The regulation was designed three years before the first mobile phone call was made, but it is very important to us,” he said. “It’s not very clear about our ability to upgrade equipment in sites and some site owners take advantage of that. People ask for prices that would make it economically irrational for us to put up a site.”
Swantee said the government must address these concerns as 4G has the potential to close the digital divide. “The whole push about broadband connectivity has been centred on enabling through fixed technology, but we are proving here that it is economically viable to use 4G to solve broadband connectivity issues in most rural areas of Britain,” he said.
Ovum principal telecoms regulation analyst Matthew Howett said Swantee’s call for the government to recognise the benefits of 4G was valid.
“The government has not paid enough attention to how mobile can be used to fulfll their obectives to get everyone in the UK to have a decent broadband connection. There could have been more of this [Cumbria style rollouts] if they had built mobile into their strategies earlier," he said.
Howett said the experience many have had with flaky or slow 3G connections could have caused this scepticism, but the benefits to rural firms in Cumbria proved that 4G could provide as adequate a service as fibre.
“The 4G spectrum is particularly well suited for things like covering rural areas so it should be a better experience [than 3G].”
EE will be hoping the benefits to rural firms in Cumbria convince the government that mobile is vital to the UK's digital future.
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