Press release: PolicyTracker warning over 4G auction proceeds proves correct

A prediction by the specialist spectrum management newsletter, PolicyTracker, that the government would not achieve its financial target in the 4G auction has been proved correct today. 

In his half-yearly budget statement in December 2012 , the Chancellor of the Exchequer, George Osborne predicted that the auction would raise  £3.5 billion. In fact, as Ofcom has announced today, it raised $2.34 billion.

When the Chancellor made his statement, PolicyTracker disputed his prediction, based on an analysis of recent auctions in other European countries. (See our article from December 21 2012) Our most optimistic estimate was £2.78 billion and most pessimistic was £1.63 billion. Average these and you get £2.21 billion – very close to the actual figure.  

“When this very basic analysis gets so close to the correct result the government needs to explain how the calculation it relied on was so far out,”  said PolicyTracker’s Managing Editor, Martin Sims.

We also noted that the Chancellor’s estimate was based on a report from consultants Pricewaterhouse Coopers entitled Timing is Everything – Releasing the Value of Spectrum  published in 2009. This focuses on pre-crash auction data  and when we factored in more recent results the estimate changed considerably.•