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Hopes rise of 4G cash windfall [Newcastle Journal (England)]
[December 18, 2012]

Hopes rise of 4G cash windfall [Newcastle Journal (England)]

(Newcastle Journal (England) Via Acquire Media NewsEdge) HOPES that next year's sale of 4G airwaves could generate a windfall for the Government have been fuelled by successful auctions in other countries. Mobile operators in the Netherlands paid a total Pounds 3.1bn for the country's 4G spectrum on Friday, easily surpassing expectations of around Pounds 366m.

In Ireland last month, operators overcame a challenging economy to generate Pounds 700m.

Brian Potterill, PwC's director of telecoms strategy, now expects the UK's 4G auction to raise the high-end of his previous Pounds 2bn to Pounds 4bn estimate.

Despite many operators finding it increasingly difficult to boost returns from mobile data, he said demand for capacity shows no sign of relenting.

Shares in Vodafone, which bought Pounds 1.1bn worth of the Dutch spectrum, were down 2% on concerns it could spend more than expected when it comes to the UK's turn to sell mobile frequencies.

Telecoms regulator Ofcom has placed a reserve price of Pounds 1.3bn on the 4G sale, but the Government's tax and spending watchdog this month estimated a Pounds 3.5bn boost to the public finances.

Industry analysts at Ovum have cautioned against speculating on how much the UK could raise.

Its regulation analyst Matthew Howett said: "Trying to guess how much money a spectrum auction can raise is a bit of a fool's game.

"We were all taken by surprise when the Government came out with the Pounds 3.5bn value. If they wanted to include any value, it should probably have been the reserve price Ofcom has set of Pounds 1.3bn." Ofcom reportedly received at least five applications by its December 11 deadline to take part in its sale.

Existing players EE, Vodafone, O2 and 3 are expected to have paid a Pounds 100,000 deposit for the chance to pick up frequencies in the 800MHz and 2.6GHz bands. BT has previously expressed interest in acquiring 2.6GHz frequencies to bolster its wi-fi offering, although it is not thought to have aspirations of becoming a major mobile player.

It is thought international and private equity firms could also have registered to take part. Ofcom may announce the names of those allowed to bid as early as this week.

(c) 2012 ProQuest Information and Learning Company; All Rights Reserved.

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