Chancellor's 4G cash prospects improve as seven bidders sign up

 

George Osborne's hopes of raising at least £3.5bn from the auction of super-fast 4G mobile spectrum got a big boost yesterday when seven telecoms companies were approved as potential bidders by the regulator Ofcom.

Three of the seven are new entrants seeking to snap up some of the 4G airwaves: BT, a subsidiary of China's PCCW, and the niche UK operator MLL Telecom.

But analysts said they expected the existing four players – EE (the owner of Orange and T-Mobile), Vodafone, O2 and Three – to pick up the lion's share.

The Chancellor came under fire in his Autumn Statement when critics said he was too optimistic for pencilling in a £3.5bn windfall, but that looks more realistic after a Dutch 4G auction last week showed demand.

The auction in the Netherlands raised £3bn, more than double what was expected, as five bidders engaged in furious bidding for three main packages of spectrum.

However, the UK auction is unlikely to smash forecasts like last week's Dutch sell-off, according to Will Draper of Espirito Santo bank. Mr Draper said Ofcom had structured the UK sale process in such a way that the four existing players were likely to be satisfied without "an overheated auction".

He reckoned the four would pay up to £1b each, netting the Treasury £3bn to £4bn. "I don't think there's anyone in there apart from BT who could upset the apple cart," Mr Draper said, noting that there were no surprise entrants such as the US giant AT&T or the Mexican telecoms billionaire Carlos Slim.

All the signs from BT are that it is looking to pick up only a small slice of 4G spectrum for its corporate customers. A subsidiary, Niche Spectrum Ventures, will bid in the auction, which will take place in early 2013, and Mr Draper suggested it was "highly unlikely" it wanted to become a major retail operator.

"The conspiracy theory is that BT raised a lot of cash for the Premier League football auction (which they didn't spend) and it's burning a hole in their pocket, and they've always coveted some mobile spectrum, ever since they sold O2," he said.

The sale will raise only a fraction of the £22bn in 2000, when the last big auction took place for 3G, or third-generation, mobile spectrum.

In the running: The bidders

Everything Everywhere The merged Orange and T-Mobile became the first to launch 4G services last month.

HKT (UK) Subsidiary of Hong Kong telecoms group PCCW.

Hutchison 3G Known as 3, it was a newcomer in the last big spectrum auction; it became the first UK network to offer mobile video calls.

MLL Telecom Based in Marlow, Bucks, a managed network operator backed by Canadian private equity.

Niche Spectrum Ventures A subsidiary of BT which is believed to want some spectrum for its corporate mobile clients.

Telefonica UK The mobile offshoot of Spain's main telecoms provider, better known as O2.

Vodafone The world's largest mobile phone operator.

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Sport
Members of the Scotland deleagtion walk past during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
PROMOTED VIDEO
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game