UK's 4G auction: Labour lays out its plans for '£4bn' windfall

The proceeds of the upcoming LTE spectrum auction have become a political issue, although no-one knows yet how much money will be raised.
Written by David Meyer, Contributor

The money raised from the UK's upcoming 4G spectrum auction should be used to build affordable housing, the Labour Party will suggest on Monday.

According to multiple reports, shadow chancellor Ed Balls will say at the party's conference that the £3-4bn expected to come out of the auction would be enough to provide equity for 100,000 new low-cost homes and a stamp duty holiday for first-time buyers.

The coalition government has not yet said what it would do with the cash. In the case of the £22bn windfall from the 3G auction more than a decade ago, then-chancellor Gordon Brown used the money to pay off national debt.

"With this one-off windfall from the sale of the 4G spectrum, let's cut through the dither and rhetoric and actually do something," Balls will say, in line with his broader call for more investment to pull Britain out of its financial hole.

It remains uncertain as to how much money the auction will generate. The telecoms regulator Ofcom, which will run the auction, has said it will make at least £1.4bn, while analysts have said the sum could go as high as £4bn.

There are many factors to be taken into account here, not least the 1800MHz spectrum that Everything Everywhere (EE) is refarming to provide 4G services for devices such as the iPhone 5.

Other operators do not have as much 1800MHz spectrum to reuse, and will probably need either 800MHz or 2.6GHz spectrum in order to roll out their own 4G services. This would suggest that EE will not be bidding large in the auction, but its rivals will.

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