4G Radio Spectrum: Full Lessons Learned Report

Summary

This full NAO report sets out the results of their review of the outcome of 4G radio spectrum auction.

In 2013, the Office of Communications (Ofcom) auctioned licences to use radio spectrum to wholesale telecommunications service providers. The licences did not specify that they had to be used to provide a particular service, but the spectrum is suited for high-speed mobile data services. The spectrum sold in 2013 provided a significant increase over the spectrum already in use and raised proceeds of £2.4 billion.

This was the first major sale of radio spectrum in the UK in over ten years and allowed much faster mobile communications technology (often referred to as 4G). Ofcom expected the auction to provide benefits for consumers estimated at £20 billion. Ofcom’s main objectives in the auction 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.

As other public assets may be sold using similar auction techniques, they have also set out a number of high-level lessons for future sales of public assets. Although maximising proceeds for the taxpayer was not an objective, they compared the proceeds raised in this auction with proceeds raised in recent spectrum auctions elsewhere in Europe.

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