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.

News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
News
people
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
ebooksAn unforgettable anthology of contemporary reportage
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
i100
Sport
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
boxing
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments