April 2025
This report, commissioned by BT, challenges the assumption made by Ofcom in its calculation of annual licence fees (ALFs) for 900MHz, 1800MHz and 2100MHz spectrum that spectrum value is stable in real terms. In reality, our analysis of international spectrum prices shows a clear downward trend since circa 2016. We have identified three main drivers for this reduction:
- Increased spectrum supply
- Increased confidence in technological advancements
- Revised mobile traffic growth forecasts.
The implications are clear: Ofcom’s approach of setting ALFs by inflating prices paid in past auctions using CPI is flawed and, in our view, should be reconsidered. We estimate that this approach results in spectrum value being overstated by approximately 41%.
This report was submitted to Ofcom in response to its consultation on ALFs in December 2024. It can be downloaded below, or from Ofcom’s own website.
