Warning: Mobile License doesn’t print money

Posted on February 21, 2013  /  0 Comments

LTE (aka 4G) is manifolds faster than UMTS (aka 3G). That doesn’t mean the governments can make more money from auctioning LTE spectrum. Her Majesty’s government, which had forked £22.5 billion from UMTS auction 12 years back, knows it. Yet the British Finance Minister, George Osborne, targeted £3.5 billion from auctioning LTE spectrum. The industry has, however, thrown ‘only’ £2.3 billion in Osborne’s hat. Because it has paid the penalty of being greedy during UK’s infamous 3G auction. Martyn Warwick of telecomtv.com analyzes:

The successful bidders in the 3G auctions completely believed that they were vying for a licence to print money, so sure were they that consumer uptake of expensive new services would be huge and instantaneous. In the event, the rollout of 3G was both more difficult and expensive than they had been anticipating and the consumers didn’t flock to sign-up and pay a premium for new and untried services and applications. It took a decade and more for the operators to write the licence losses through and off their books. 4G costs won’t take anywhere near as long.

British government has evidently failed to register the ground reality.

Meanwhile, the government’s financial strategy, such as it is, remains under the titular control of a pompous clown who can only count to twenty by taking his socks off, George Osborne will deserve all the scorn, sarcasm and opprobrium that will be thrown at him in the days, week and months to come. He made himself hostage to fortune and was warned about it and he only has himself to blame. If he was the CFO of a company he would be out on his ear this morning – and rightly so.

Aren’t we littered with the doubles of Osborne across Asia?

Martyn’s full article in telecomtv.

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