Investigation Launched by National Audit Office into Discrepancy in 4G Auction Proceeds
The National Audit Office (NAO) has confirmed that it will be conducting a value-for-money study of Ofcom's 4G spectrum auction, following complaints from Labour MP Helen Goodman. The investigation aims to assess the efficiency of the auction, the promotion of competition, and the overall economic benefits realised compared to the public cost or opportunity costs.
In January 2021, the 4G auction raised £2.3 billion for the Treasury, with Vodafone, EE, Three, and BT each acquiring parts of the LTE spectrum in the 800MHz and 2.6GHz bands. The auction's design focused on promoting competition and ensuring coverage, rather than maximising revenue. This approach was a departure from the 3G auction that took place in April 2000, which raised £22.5 billion for the Treasury.
The 4G auction's innovative regulatory tools included spectrum floors, which reserved portions of spectrum for smaller competitors or new entrants like H3G. This led to competitive bidding patterns and market value, reflecting a balanced approach to competition and efficiency in the UK mobile market.
While academic and regulatory discourse around the 4G spectrum auction has analysed the process and outcomes, the NAO’s official value-for-money study report and findings on Ofcom’s recent 4G auction are not yet available in the public domain as of mid-2025.
As the mobile industry moves towards 5G and 6G, Ofcom is preparing for auctions of higher frequency bands. These auctions, distinct from the UK's earlier 4G auctions, focus on higher frequency bands in millimeter wave bands.
The long-term benefits of the 4G auction are expected to deliver significantly more value to the UK than the revenue raised in the auction. The auction will create competition, with five companies able to launch competitive 4G services, benefiting UK citizens and consumers in line with Ofcom's statutory duties.
The NAO is currently scoping the study and will announce soon what it will cover and when they expect to report. Updates on the investigation's progress and findings will be expected from the NAO or government sources once the audit is complete.
[1] Academic and regulatory sources on the 4G spectrum auction can be found at: [URL] [2] Information on Ofcom's 5G and 6G spectrum auctions can be found at: [URL]
- The NAO's value-for-money study, due for announcement, will investigate the financial aspects of the 4G spectrum auction, assessing the returns on investment in the context of the UK's technology industry.
- The 4G spectrum auction, with its focus on promoting competition in the finance sector, has paved the way for the UK mobile industry's transition to 5G and 6G, demonstrating the intersection of finance, technology, and industry.
