December 6, 2012

4G Auction Windfall Clarified by Treasury

During George Osborne’s Autumn Statement yesterday he revealed that he expects to receive £3.5 billion pounds from the 4G auction taking place in 2013. The windfall will boost the Treasury’s coffers at this difficult time.

Back in 2000, the Treasury received a massive £22.5 billion pounds from the sale of the 5 3G mobile licences in the UK. This time a more realistic figure is expected taking into account the state of the economy and the finances of the mobile operators themselves.

A reserve price for the sale of the 4G licences has been set of 1.3 billion pounds but we now know that the Treasury expects nearly 3 times this to be paid. In August, researchers at PwC predicted an income of between 3 and 4 billion pounds to be achieved. The Irish 4G auction was recently completed with Vodafone, Three, Meteor and O2 paying nearly 390 million pounds for the 4 4G mobile licences with a further 350 million pounds on renewal in before 2030. This was higher than expected.

The 4G UK auction bidding begins early in January with the successful bidders ( and what the Treasury receives ) being confirmed in either February or March. The successful bidders are then able to launch 4G in May at the earliest.

More comprehensive details for the 4G auction can be viewed here.