Overview

Providers of public electronic communications networks (ECNs), electronic communications services (ECSs) and associated facilities operating in the United Kingdom may be required to pay Ofcom licence fees and other administrative charges. These charges ensure that the cost of regulation is borne by the providers who benefit from regulated access to the market rather than by the general taxpayer. Ofcom licence fees may include:

• annual administrative charges under the Communications Act 2003;
• spectrum licence fees under the Wireless Telegraphy Act 2006;
• number charges arising under the National Telephone Numbering Plan; and
• fees connected with applications for Code Powers.

This page provides an overview of the legal basis for Ofcom licence fees, the methodology used to calculate Ofcom licence fees, and how Bratby Law assists clients in assessing and managing their liabilities.

Legal framework for Ofcom administrative charges

Under sections 38–41 of the Communications Act 2003, Ofcom may require providers carrying on a relevant activity to pay annual administrative charges to recover the costs of its regulatory functions. A provider is liable if:

• it carries on one or more relevant activities, and
• it has relevant turnover of at least £5 million in the “last but one” calendar year before the charging year.

What is a relevant activity?

Ofcom’s Designation and Relevant Activity Guidelines define the following as relevant activities:

• the provision of an ECS to third parties;
• the provision of an ECN, an ECS, or network access to other communications providers; and
• the making available of associated facilities.

ECS provision includes retail and wholesale services supplied to consumers and businesses. ECN provision includes the establishment, operation and maintenance of networks for others, including outsourced networks or the provision of indefeasible rights of use. Associated facilities include any physical or virtual facility enabling the provision of a network or service, such as masts, ducts, poles, servers and data centres.

Turnover must be calculated in accordance with Ofcom’s guidelines and return methodology.

Relevant turnover and reporting

Every year Ofcom issues a General Demand for Information requiring liable providers to submit their Telecoms Annual Revenue Return (TARR). Providers must:

• submit returns through Ofcom’s online portal;
• base turnover figures on audited accounts;
• exclude non-relevant revenue; and
• apply the allocation principles set out in Ofcom’s Statement of Charging Principles.

Ofcom uses the data to apportion its annual administrative budget across all liable providers.

Spectrum licence fees

Providers holding Wireless Telegraphy Act (WTA) licences must also pay spectrum licence fees. These fees reflect the cost of managing spectrum, including allocation, planning, assignment and monitoring.

Ofcom’s Tariff Tables 2024/25 set out the charges applicable to each licence class. Fees vary depending on:

• the band, bandwidth and frequency range assigned;
• whether the licence is auctioned, tradable or administratively priced;
• geographical scope;
• spectrum management costs; and
• the use of Administrative Incentive Pricing (AIP) to reflect opportunity cost.

Spectrum licence fee liabilities often arise as well as administrative charges under the Communications Act – the two types of Ofcom Licence Fees cumulate.

Number charges

Ofcom allocates numbers under the National Telephone Numbering Plan. Annual number charges apply to certain ranges, including:

• non-geographic numbers;
• corporate numbering ranges;
• specific business or revenue-generating services.

Charges reflect scarcity and management costs and are set out annually in Ofcom’s Tariff Tables.

Providers must maintain compliance with Ofcom’s numbering conditions and return unused blocks when required.

Code powers fees

Operators granted Code powers under the Electronic Communications Code must pay:

• a £10,000 application fee for Code powers; and
• an annual fee, currently £1,000, for maintaining Code operator status.

These charges recover Ofcom’s costs of processing and administering Code power authorisations. See our Code Powers and Access to Land page for further detail.

Statement of Charging Principles

Ofcom publishes a Statement of Charging Principles each year setting out how it calculates Ofcom licence fees. This document describes:

• how administrative charge totals are calculated;
• how costs are allocated between licence categories;
• how providers’ shares are determined; and
• the process for consultation and update.

The charging framework aims to be transparent, proportionate and consistent with Ofcom’s statutory duties.

How Bratby Law assists

We support clients across all aspects of Ofcom licence fees and regulatory charging, including:

• determining whether a provider engages in a relevant activity;
• assessing relevant turnover and preparing TARR submissions;
• allocating turnover appropriately between relevant and non-relevant activities;
• reviewing spectrum, numbering and Code power fee exposures;
• evaluating fee liabilities during transactions or refinancing;
• advising on disputes relating to Ofcom licence fees;
• ensuring consistent compliance with the Communications Act reporting regime.

Acting as co-counsel

We frequently act alongside larger corporate and finance law firms, providing specialist guidance on Ofcom Licence fees:

• telecoms regulatory due diligence;
• fee exposure assessments during M&A;
• integration or divestment transactions involving regulated assets;
• communications with Ofcom relating to turnover, TARR submissions or charging issues.

Why clients choose Bratby Law

Clients instruct Bratby Law for:

• decades of experience advising on Ofcom’s charging frameworks;
• deep knowledge of relevant-activity and turnover-attribution methodologies;
• experience of Oftel’s original charging model and its modern evolution;
• integrated expertise across ECNs, ECSs and associated facilities;
• precise, commercially-focused advice on charging risk and governance.

Related telecoms regulation pages

See also our other telecoms regulation pages:

• Interconnection regulation
• Ofcom General conditions of entitlement
• Numbering
• Spectrum
• Lawful intercept and the Investigatory Powers Act 2016
• Code Powers and access to land
• Am I regulated?
• SMP regulation and market reviews
• Telecoms Security
• Ofcom
• Complaints and investigations

Independent directory rankings

Our specialist expertise is recognised in major independent legal directories:

• Chambers & Partners: Rob Bratby is ranked in the UK Guide 2026 in the “Telecommunications” category: Chambers
• The Legal 500: Rob Bratby is listed as a “Leading Partner – Telecoms” in London (TMT – IT & Telecoms): The Legal 500
• Lexology: Rob Bratby is featured on Lexology’s expert profiles (Global Elite Thought Leader): Lexology

What clients say about Bratby Law:

Related services

• Telecoms Regulation Overview
• General Conditions of Entitlement
• Spectrum Regulation
• Code Powers and Access to Land
• Transactions and M&A

Frequently asked questions