Feeds

UK taxpayer 'fleeced' in spectrum selloff windfall

MP Watson gets stuck into the auction

  • alert
  • submit to reddit

Using blade systems to cut costs and sharpen efficiencies

British taxpayers are bailing out Europe again. This time, it isn't aid to the basket-case Euro economies of Greece or Ireland, says MP Tom Watson, but a spectrum windfall that the taxpayer should pocket... only won't.

Watson can't understand why profits from the sale of spectrum originally gifted to mobile operators in 1991 should be pocketed by the private sector. The owners of the beneficiaries include Telefonica, which owns O2, and France Telecom and Deutsche Telecom, who own Everything Everywhere - the merged Orange and T-Mobile. Whose spectrum is it anyway?

Yesterday, at the first of two Commons Media select committee hearings into spectrum, Watson doggedly questioned representatives of Everything Everywhere on why the venture's French and German owners should benefit, but not the UK taxpayer.

It made for good TV, by parliamentary TV standards.

Watson reckons that the spectrum being sold by Ofcom - as a condition of the Orange/T-Mobile merger - may be flogged for around £450m. Neither Richard Moat, EE's CFO and Nick Ott, VP of strategy, would be drawn on a figure.

Watson sounded incredulous.

Moat confirmed Everything Everywhere was paying £33m a year in spectrum fees to Ofcom. Didn't this leave a profit of around £290m, then, asked Watson?

"You're about to get a third of a billion quid dividend from it - a surplus for a piece of spectrum you were given for free?" he asked.

"These licences were awarded between 20 and 30 years ago," complained Moat. EE said that money raised from the windfall will benefit UK users.

"So the profit will be ring-fenced for investment in the UK network?" asked Watson.

"Ah, not ring-fenced," admitted EE.

"Do you not think the public should get a share of the profit you're making?"

"That was taken by the authorities when it approved of the merger. It was not our decision to sell it in the first place," replied Moat.

Ott pointed out that the company, and its predecessors, had invested in £58bn over 20 years in adding value to that spectrum. Without the capex, it wouldn't be worth very much at all. Everything Everywhere also said they'll be left out of pocket once expenditures start on building the 4G networks.

Watson has a point, though. Why do companies think that once gifted stewardship of a public resource, they think it's theirs for life?

It's O2's turn in the firing line next. ®

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
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
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
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
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

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.