The UK government has sold only a third of its fixed radio spectrum licences - netting a mere £38m in the much-anticipated auction.
The Department of Trade and Industry had hoped to make £1bn from the auction, but on Monday it confirmed it had sold only 14 out of a total of 42 licences in the 28Ghz band.
The results leave almost half of the UK's population with no choice other than to use traditional copper telephone lines to access broadband services. They are also a blow to the government, which previously made £22.5bn during this year's auction for third-generation licences.
Patricia Hewitt, minister for ecommerce and small business, has launched a investigation into the sell-off, and confirmed that further licences in the 3.4Ghz, 10Ghz and 40Ghz bands will be up for auction next year.
At this week's auction, licences were awarded in densely populated regions - and areas including Wales and the South West failed to attract a single bid. The winning operators include Energis, Faultbasic, Chorus Communication and Eircom.
"As a result of this auction 60 per cent of the UK's population will have access to a new source of high-speed internet," said Hewitt. "This will provide competition to fibre, cable links, DSL phone lines and satellite, which also offer access to broadband services."
The auction has not been without controversy. The sell-off had been delayed by a month because the government wanted to review bidders in more detail, while Orange pulled out at the eleventh hour.
The mobile phone giant, which plans to float on the stock market at the beginning of next year, declined to explain its decision.
The winning bidders
The UK government auctioned three spectrum licences in the 28Ghz band in each of the 11 English regions, and Scotland, Wales and Northern Ireland. A total of 10 bidders took part. Here are the winning operators:
- Energis Local Access wins six licences in Greater London, Greater Manchester, West Midlands, Yorkshire, Scotland and Northern Ireland
- Norweb Telecom wins four licences in Greater Manchester, West Midlands, Yorkshire, and North England
- Faultbasic wins three licences in Greater London, Greater Manchester and West Midlands
- Broadnet wins one licence in Greater London
- Chorus Communication wins one licence in Northern Ireland
- Eircom NI wins one licence in Northern Ireland.
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