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NAO to conduct value for money study of Ofcom's 4G auction

Sophie Curtis | April 17, 2013
The National Audit Office (NAO) has confirmed that it intends to conduct an investigation into Ofcom’s recent auction of 4G spectrum, to see whether it achieved the best possible return for the UK economy.

Commenting on the news, analysts at Espirito Santo said that the issue is contentious, as the forecast proceeds of £3.5 billion were included in the government finances in the Autumn Statement last December, and have effectively already been spent.

"This investigation is a questionable use of public funds, in our view - the structure of the auction was set up to ensure four credible national wholesale mobile operators (notably reserving spectrum for the fourth largest operator, Three UK), not to maximise revenues for the Government. We believe the Government was being over-optimistic in its forecasts."

As yet, no new 4G services have gone live as a result of the auction, although the UK's largest operator EE is already providing 4G in 50 towns and cities using its re-farmed 1800MHz spectrum.

O2, Vodafone, Three and BT are expected to launch their own 4G services using the newly auctioned 800MHz and 2.6GHz spectrum in the summer.

 

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