OFCOM will adopt a degressive model to calculate spectrum fees, recognising that the current model is not fit for purpose
Swiss operators could save one million francs per year: Swiss mobile operators will benefit from lower spectrum fees from next year. The Federal Office of Communications (OFCOM) announced last week that it will change the way these fees are calculated, and introduce a ‘degressive tariff’ in line with the allocated frequency bandwidths. This reduction will result in a saving for mobile operators by about CHF1m (£801k) per year.
OFCOM has calculated it needs less than it currently gets: Spectrum fees cover the costs for the administration and technical supervision of the frequencies. OFCOM recognises that Salt, Sunrise, and Swisscom have acquired large amounts of spectrum in recent years, which has led to a sharp rise in the annual fees they pay. In contrast, OFCOM's expenditure on the administration and technical supervision of mobile communications has remained more or less stable. OFCOM expects this to remain the case in the coming years, hence the decision to change the way in which the fees are calculated. Under the current model, fees are proportionate to the allocated bandwidth, with a charge of CHF50 (£40) for every 12.5KHz occupied. Under the new model, the fee remains unchanged for bandwidths up to 20MHz. For additional bandwidths up to 200MHz it will go down to CHF35 (£28) for every 12.5KHz. For additional bandwidths above 200MHz, the fee will be CHF12.5 (£10) for every 12.5KHz.
Another Ofcom is determining annual licence fees: The Swiss regulator’s decision comes at a time when the UK regulator Ofcom is about to make a decision on the annual licence fees (ALFs) for the 2.1GHz band. Ofcom ran a consultation proposing to set the ALFs for this band at £0.57m per MHz for paired spectrum and £0.29 per MHz for unpaired spectrum. Ofcom’s proposal is largely based on the estimated market value of the 2.1GHz band – a radically different approach than the Swiss regulator, which had the administrative and technical costs incurred by the Federal Government as the main consideration to reduce the fees.
