Ofcom 4G auction achieved competition goal

National Audit Office report says Ofcom achieved its goal of maintaining a competitive market through last year's 4G auction

Ofcom achieved its goal of maintaining a competitive market through last year's 4G auction, according to a National Audit Office (NAO) report. But the NAO claimed it was too early to say whether the allocations went to those that will make the best use of it.

The 4G spectrum auction raised about £2.4bn. The NAO report said the sum raised was in a similar range to that achieved in other European countries. EE, O2, Three, Vodafone and new entrant Niche (BT) all won allocations.

The auction's aims were “to maintain a competitive market by having at least four national wholesale providers, each with an adequate holding of radio spectrum; and, subject to the above objective, achieve an economically efficient allocation of spectrum to bidders who valued the spectrum the most and, by implication, could be expected to make best use of it”.

The NAO said Ofcom had succeeded in maintaining competition, but said time will tell whether the most will be made of the allocations by suppliers.

“Whether or not the auction succeeded in allocating spectrum to those who can make best use of it will only start to become apparent as the spectrum is brought into use by the winning bidders," the report said. "As one of the conditions of the licences awarded in the auction, Ofcom can monitor operators’ use of the spectrum and operators themselves can now buy and sell spectrum to match their business requirements.”

Ofcom said it expects consumers to benefit to the sum of £20bn but a lot depends on how it is used by the auction winners, which is still uncertain. Ofcom will monitor this.

Examples of uses include EE’s plans to expand its 4G network to aid commuters and to recruit more than 1,000 new customer service staff over the next 24 months. 

Eighteen of the UK’s airports, including Heathrow, Gatwick, Stansted, Manchester, Newcastle and Bristol, are now covered by EE’s 4G network. Train routes from Brighton to Glasgow will be served by 4G in the coming year. 

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