Whitehalls telecoms auction endorsed by NAO

18 Oct 01
The government did not impede the development of third-generation mobile phone technology by forcing operators to pay too much for licences, the National Audit Office has ruled.

19 October 2001

The public spending watchdog has endorsed the decision to run an auction to sell the radio spectrum to mobile phone companies. It has rejected suggestions that the government put profit before the long-term development of the technology.

Competition was intense during the sale, the first offering access to a major European market, and the £22.5bn raised was higher than expectations.

But critics claimed that the government had forced companies to pay so much for the licences that they would have no money to spend on developing the services.

However, the NAO has concluded that the auction, run by the Radiocommunications Agency, was 'well-designed and efficient'. It said: 'The high cost of the licences to operators gives them an added incentive to roll out services more quickly than if the spectrum had been given away.'

Comptroller and auditor general Sir John Bourn said of the agency: 'It has managed to raise significant revenues and promote competition in the industry.'


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