The £2.3bn raised by the government in the 4G auctions earlier this year is to be probed by the National Audit Office (NAO) to see if it achieved the best possible return for the UK economy.
The figure raised was £1bn short of the £3.5bn budgeted for by George Osborne in his Autumn Statement, and 10 times lower than the staggering £22bn raised in the 3G auctions in 2000.
The NAO confirmed to V3 that it now intends to carry out an investigation, with a spokesperson explaining it was always likely to do as part of its remit.
“We can confirm we will be examining the 4G spectrum auctions. We looked at the 3G auctions and would look at the 4G auctions as a matter of course,” they said
No detailed timeline has been set for the probe but it seems unlikely anything concrete would occur before the autumn given the complicated nature of the auction process.
Ofcom said it was aware of the probe by the NAO but stood by the outcome of the auctions, claiming it was a success for the UK on a number of factors, not just financial outcomes.
“The 4G auction was a success, which will deliver the maximum benefit to UK citizens and consumers - in line with Ofcom’s statutory duties. It will create competition, with five companies able to launch competitive 4G services," a spokesperson told V3.
“The auction was designed to promote competition and ensure coverage, rather than to raise money. These benefits will deliver significantly more value in the long term to the UK than simply the revenue raised in the auction.”
Although they money raised by the government was below its forecast, it did come in higher than the Ofcom reserve price of £1.3bn. Many commentators said the government created its own negative headlines by talking publicly about an estimated figure it hoped to raise.
To date no services from the new auctions have gone live, although EE is providing 4G to the market from its refarmed 1800MHz spectrum.
Vodafone and O2 are expected to come online in the near future with their services, although they face a battle to catch EE, which now has some 50 locations live around the UK with its services.
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