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186k
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186k,
User Rank: Moderator
9/25/2015 | 11:14:32 AM
Re: Triple?
I think the fees get passed through as general income for the gov & help to improve, in a very small way, the fiscal position

It's debatable whether the hike in fees will actually feed through into higher consumer tariffs as the competitive situation may limit this as mentioned above. Also despite their regulatory posturing they'll already have budgeted for this level of fees

One other point, standing back a bit, if you buy into the school of thought on spectrum liberalisation that lets the market decide the appropriate price of spectrum through auctions, spectrum trading etc., then this is simply Ofcom bringing these outdated rates into line with the market
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
9/25/2015 | 10:49:50 AM
Re: Triple?
186k - "I think it's pretty easy to justify the uptick in fees, as the operators were utilising a public asset (spectrum) for way below market rates.... "

Right, I get that, but the operators just pass the cost on to the customers – the very same public whose interest the government is supposed to be protecting here. 

How are the fees used once collected?
186k
50%
50%
186k,
User Rank: Moderator
9/25/2015 | 7:31:05 AM
Re: Triple?
I think it's pretty easy to justify the uptick in fees, as the operators were utilising a public asset (spectrum) for way below market rates and were given around five years to prepare for this change. Anyway, they could always sell the spectrum if they feel the rates are too high but that'll never happen

What wasn't justified was the adhoc blackmail-type approach of the government last year to extract better rural coverage from the mobile players. They were told or assumed (not sure which), they would get better terms on the new spectrum rates to compensate but have been disappointed
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
9/24/2015 | 10:55:04 PM
Triple?
Tripling rates? 

Or trebling, as you say over there?

It's hard to justify that, no matter what the rationale, particularly because those costs are inevitably going to pass on to the consumers – the very people whose public resource the government is supposedly protecting by raising tariffs. 

 
MikeP688
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MikeP688,
User Rank: Light Sabre
9/24/2015 | 7:12:04 PM
Re: How to justify price hikes to public? They can't
It would be a very interesting debate if the FCC even thought about remotely pulling off such a stunt by exploiting gaps in existing legislation.     As the debate over net neutrality showed, people will not be forgiving.
Ray@LR
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50%
[email protected],
User Rank: Blogger
9/24/2015 | 1:42:43 PM
How to justify price hikes to public? They can't
As Iain notes:

"Despite suggesting it may have to pass the higher costs on to its customers, EE and its rivals may struggle to increase prices in such a competitive market and would probably fall foul of competition authorities if they did so in unison."

So right now the folks looking at this decision and being really worried are those in support and marketing jobs at the mobile operators as they will see their budgets cut and may lose jobs. 

If jobs are cut, the operators will blame Ofcom. The regulator will say it is a decision made by the operators. 


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