We’ve recently been writing quite a bit about Ofcom’s 4G spectrum auction that will be held soon. Basically, Ofcom will sell off chunks of spectrum to whichever mobile network bids the most. As 4G is already a big buzzword and the future of telecommunications lies in high speed wireless access, Orange, O2, Vodafone and the rest are likely to break the bank to ensure they get a decent portion. Despite their best efforts to keep costs down, the fact they are bidding against their direct commercial competitors means that Ofcom is due a big payday soon. This is claimed to be a good thing for the British public.
But perhaps there’s a lesson to be learned from the way the 3G spectrum was sold off here in the UK and elsewhere? Unlike here, in Sweden the 3G licenses were given away to the mobile companies absolutely free by their telecoms authority. Safeguards were put in place to ensure that the 3G infrastructure would cover the whole population, not just the lucrative densely-populated urban areas and that the successful companies actual had the will and means to install the masts and other hardware.
The idea was by saving money on an expensive bidding process, the telecoms companies could instead spend their cash on things that benefited them and their customers – advertising and installing the infrastructure. Largely because of this, 3G services have been much more commercially successful and more widely-adopted in Sweden than in the UK. As for the lost funds from giving away the radio spectrum to mobile networks free? Well, consumers pay tax on their phone bills which meant that the Swedish government was able to recoup much more money than they would have received for a one-off license.
If only Ofcom could be so thoughtful about the 4G spectrum sale here in the UK…