James Moore: Chancellor won’t get hammered in auction
It's a risky thing to set a target price for an auction as the Government has done with the sale of bandwidth for 4G mobile phone broadband services.
Auctions are unpredictable things, and you have no idea how the bidders will behave once they get started. That's why the best bet is to stick with the reserve (it's £1.3bn in this case) because it allows you to claim anything above it as a success.
Announcing you're counting on getting more than twice that, and spending the money before it's in, and you run a very real risk of getting horribly embarrassed.
Luckily for the Chancellor, there are a couple of things working in his favour. The first is that there are more bidders than just the existing mobile companies.
Everything Everywhere (the silly name for the owner of Orange and T-Mobile), Vodafone, O2 and Three are all in there, as is BT. But there is also the Hong Kong conglomerate PCCW and UK network supplier MLL Telecom.
The bigger the field, the better the outcome. European auctions have also provided a better- than-expected return for chancelleries that need the money even more than we do, another encouraging sign.
It's true that the madness of the 3G auction that provided £22bn for Gordon Brown to waste won't be repeated. But the bidders know that the risk of overpaying isn't quite what it seems. Take Vodafone, which spent £6bn in the UK 3G auction. It funded its bid by borrowing. That bid, and the interest on the borrowing, have contributed to a lower-than-expected corporation tax bill, which has created a certain amount of comment recently.
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 2 Orange Is The New Black has not been cancelled – it was a hoax
- 3 Why I'm on the brink of burning my Israeli passport
- 4 Israel-Gaza conflict: ‘Sderot cinema’ image shows Israelis with popcorn and chairs 'cheering as missiles strike Palestinian targets'
- 5 Blackest is the new black: Scientists have developed a material so dark that you can't see it...
Pope Francis: ‘One in 50’ Catholic priests, bishops and cardinals is a paedophile
Fry ‘criticises Operation Yewtree in dinner party rant’ calling for tougher laws to deter false sex abuse allegations
Supermoon 2014 in pictures: Moon appeared bigger and brighter at the weekend
Saharan remains may be evidence of first race war, 13,000 years ago
Israel-Gaza conflict: ‘Sderot cinema’ image shows Israelis with popcorn and chairs 'cheering as missiles strike Palestinian targets'
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
Emergency data law: David Cameron plots to bring back snoopers’ charter
NUT strike: David Cameron announces crackdown on strike action ahead of mass industrial action
iJobs Money & Business
£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...