UK gets smaller-than-expected windfall from 4G sale

Wednesday 20 February 2013 19.27
£2.34 billion raised in UK 4G super fast mobile broadband auction
£2.34 billion raised in UK 4G super fast mobile broadband auction

The UK government will get a smaller than expected £2.34 billion sterling windfall from airwaves auctioned for 4G super fast mobile broadband.

The sale saw all existing mobile operators winning spectrum.

The Treasury had pencilled in proceeds of £3.5 billion from the sell-off.

However, the total will rise slightly after a final stage of bidding to allocate the winners' bands of airwaves.

Mobile operators Vodafone, O2, EE and Three all successfully bid, as did fixed-line operator BT, regulator Ofcom said today.

The regulator had structured the auction to deliver maximum benefits for businesses and consumers rather than maximise revenue for the government.

"This is a positive outcome for competition in the UK, which will lead to faster and more widespread mobile broadband, and substantial benefits for consumers and businesses across the country,'' Ofcom chief executive Ed Richards said.

Vodafone, the country's third ranking operator, paid the most, some £790.8m to win a five blocks of airwaves, Ofcom said.

The biggest operator EE, which has already launched 4G services in major British cities using its existing airwaves, paid £588.9m to buy more to extend coverage countrywide, Ofcom said, while O2, owned by Telefonica, paid £550m for two tranches.

Ofcom reserved airwaves for a fourth operator in order to keep the market competitive. Hutchison 3G, the operator of fourth-placed Three, paid £225m to win the bands, Ofcom said.

BT bid £186.5m to pick up three blocks of spectrum. It said it would use the licenses to provide its customers with better mobile broadband, but it would not build a national mobile network.