G3 £20bn windfall: how should the government spend the money?



How should the Government use the £20bn windfall from the auction of third generation mobile phone licences?

Microsoft chief Neil Holloway wants...



How should the Government use the £20bn windfall from the auction of third generation mobile phone licences?

Microsoft chief Neil Holloway wants it ploughed into a broadband comms infrastructure, while the CSSA says the money should be used to make the UK workforce IT-literate. Others favour spending it on health and education.

But before we all get carried away, we should ask a more fundamental question: is it good that companies are spending £2,000 per potential user to become part of the future mobile telecommunications market?

The original projection was that telcos would shell out a maximum of £5bn for the new licences.

With bidding now at four times that amount, even major players like MCI Worldcom have had to pull out of the race.

Market forces - or more precisely sentiment in a sector where stock market valuations are currently driven by market share - has now delivered a windfall tax on future mobile telecoms four times what was planned.

And have no doubt: it will be a tax on users.

While the telcos will queue up to offer giveaways to a few high-profile early adopters of the new UMTS technology, it is now likely that the mainstream of corporate users will be paying more than expected.

So far, mobile telecommunications and the better mobile computing they enable, have failed to deliver.

Bluetooth is a year late. GPRS, which has just become available, is still inadequate for real mobile e-business.

Now it looks like UMTS technology will take its first steps shackled in the leg-irons of a £20bn tax that nobody wanted.

Not even the Chancellor wants it: Gordon Brown got his wrist slapped by the IMF simply for promising £6bn in NHS spending at the last Budget.

The likelihood of a £20bn technology splurge - on infrastructure, training or anything else - is nil.

So before "how should we spend the telcos' £20bn?" becomes the after-dinner topic of the day, we should remember that - if we want to be part of the third generation of mobile comms - it is really our money they're spending.

Read more on Network hardware

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close