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Anorak | Mobile phone spectrum fees rise: Costs to us won’t

Mobile phone spectrum fees rise: Costs to us won’t

by | 11th, October 2013

THE mobile phone companies have got all hot under the collar about new fees they’ve got to pay for the spectrum they use to provide the service. So much so that they’ve actually started lying about it. For this rise in fees will have absolutely no effect at all on the prices the companies charge us :

The communications regulator on Thursday unveiled plans to increase the amount it charges EE, Vodafone, O2 and Three for using certain bands of the airwaves by between 330pc and 433pc, meaning an increase in combined annual fees from £64.4m to £309m.

The move will provide a £245m a year boost to the Treasury, but the mobile operators said that it would discourage investment in new 4G services and labelled the price rises “excessive”.

Industry sources said they were digesting the likely implications of the new fees, adding that they may have to charge customers extra in order to protect margins.

That last is nonsense. A company does not add up its costs then decide what the price will be. A capitalist company charges the maximum it thinks it can get away with regardless of its costs. So, changing the costs doesn’t change the prices charged: it is competition from other suppliers of the same or similar goods that determines the price they think they can get away with.

So, raising these spectrum charges doesn’t change the price to us consumers. It just changes who gets that chunk

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Posted: 11th, October 2013 | In: Money, Technology Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink

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