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Poor 4G auction to be investigated by National Audit Office


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4G looks set to greatly improve the end-user mobile experience, promising speeds up to 10 times greater than those offered by its predecessor, 3G. The auctioning of the 4G spectrum to UK mobile providers took place last June, with five mobile providers securing a portion of the spectrum. However, despite the benefits of 4G mobile communications, the auction did not reach its forecasted revenue, falling short by approximately £1.2bn. This less-than-satisfactory sum has prompted an audit by the National Audit Office.

The 4G auction raised £2.3bn in total, with Everything Everywhere, Telefónica UK Ltd, Vodafone, Hutchison 3G UK and BT-owned Niche Spectrum Ventures all placing successful bids. And although theoretical bids totalled £5.2bn, these values were never finalised as a result of the introduction of an eBay-like system of bidding; the highest bidder paid only slightly more than the second highest, in an effort to make the auction harder to rig. Despite these precautions, the government is being criticised for not attempting to maximise the revenue from the auction, and for this reason it is being investigated by the National Audit Office on the grounds of a government failing in terms of the ‘value for money’ achieved by the project.

Not everyone is disappointed by the results of the auction. Vodafone has managed to increase its total share of the UK mobile spectrum from 23% to 28%, with rivals such as O2 and Three suffering a drop in total market share by 5% and 6%, respectively. The results of the 4G auction audit are sure to be an interesting read, but despite the controversy, it is still hard to deny the benefits that will be afforded to 4G users. With EE having started the rollout of its 4G provision, and the remaining four providers soon to follow suit, what will be more interesting are the possibilities that 4G’s faster speeds will bring to the world of mobile telephony.



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