Feeds

Finns fail to warm to 2.6GHz auction

Ofcom: 'Gulp'

The Power of One Infographic

Ofcom may be sweating at the news that the Finnish auction of 2.6GHz raised only €3.8m. The regulator is hoping to raise a lot more when the same spectrum is auctioned off in the UK next year.

Earlier auctions in Sweden and Norway raised €230m and €29m respectively, with the Norwegian figure reflecting the limited application of such a high frequency in a sparsely populated country. Those were a year or two back, but even changing economic times can't completely explain why the Finnish auction raised so little.

It seems several factors contributed to the low valuation of the Finnish airwaves: the lack of incoming competition, the history of beauty contests and a cultural reluctance to get involved in auctions.

The most important factor seems to have been the lack of competition. The band auctioned off this week was wide enough for all of the existing mobile operators to grab a share - with no newcomers bidding against them there was simply enough spectrum to go around, and the abundance reduces value.

Historically Finland awarded radio spectrum on a beauty contest basis: the regulator sets a price and companies come forward and explain their plans, and the regulator then awards the licence to the company it feels will offer the best service. That's "best" for the citizens, not the treasury coffers or company's shareholders.

Auction systems are less open to bias, or outright corruption, and much cheaper to organise, but not something to which the Finns are used and that may explain the reluctance to bid higher.

UK companies are well used to bidding for spectrum, but the abundance could well impact on prices paid in next year's super-auction which is intended to include the 2.6GHz spectrum that Ofcom has been trying to get shot of for the last few years, as well as the Digital Divided spectrum at 800MHz - selling a lot of spectrum in one go is going to reduce scarcity considerably.

The nice chaps over at PolicyTracker have done the maths: based on the price paid for 2.6GHz in Sweden Ofcom can expect to get just shy of €1.5bn, but using the Norwegian numbers the treasury gets less than €48m.

Officially Ofcom doesn't care how much an auction raises - the purpose is to ensure efficient use of spectrum not raise money for the exchequer. But in an election year you can be sure someone would find a use for that additional €1bn. ®

The Power of One Infographic

More from The Register

next story
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Microsoft unsheathes cheap Android-killer: Behold, the Lumia 530
Say it with us: I'm King of the Landfill-ill-ill-ill
All those new '5G standards'? Here's the science they rely on
Radio professor tells us how wireless will get faster in the real world
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
Oh girl, you jus' didn't: Level 3 slaps Verizon in Netflix throttle blowup
Just hook us up to more 10Gbps ports, backbone biz yells in tit-for-tat spat
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.