Superfast mobile broadband to benefit the public
The launch of superfast mobile broadband will benefit the public by £ 20 billion ( Dh116 billion) during the next decade, according to the communications watchdog.
The auction for the spectrum to run 4G services formally began on Wednesday, with confirmation that seven companies would compete for the scarce bandwidth necessary to carry fast mobile Internet services over mobile phones.
Ofcom calculates that £ 20 billion benefit will come in the form of the saving consumers will make by having access to superfast mobile services. The regulator said the advantage to the public and the economy would “very significantly” exceed the immediate financial windfall raised by the auction.
Ed Richards, chief executive of Ofcom, said: “Ofcom’s 4G auction is designed to deliver the maximum benefit to the UK. We believe that this is likely to be at least £ 20 billion over the next 10 years for consumers alone who will be able to access new digital services across the country.
“It will also make a very significant contribution to the UK GDP [ gross domestic product] through new mobile revenues, employment opportunities and software development.”
There has been controversy over how much would be raised by the 4G auction. The government credited its books in December last year with the £ 3.5 billion it expected to raise in the sale. However, Ofcom, which is running the auction process, would not confirm that figure.
That £ 3.5 billion is broadly in line with analysts’ expectations, although is much less than the £ 22billion raised in the auction of 3G spectrum in 2000, at the height of the dotcom boom.
In response to an FT request, Ofcom said that its economists had calculated a £ 20 billion consumer benefit during the next 10 years from the provision of 4G services.
The regulator has used a ‘ consumer surplus’ figure — a measure of the benefit that people gain from consuming goods and services — which is often adopted when analysing the impact of government intervention in markets.