Is the tide turning against auctions?
Jun 29, 2018 by Richard Handford

Blog

LocationEurope, Global, Japan
TagsAuctions, beauty contests, France, India, Japan

Will 2018 will be remembered as the year when auctions passed their peak?

Or maybe government and regulators are simply learning how to blend financial requirements with other criteria in more creative ways when they award spectrum?

India, for example, noted for repeat auctions and eye-watering reserve prices, appears to be losing its enthusiasm for such contests.

A recent policy document says the government will seek “optimal” pricing for spectrum, a subtle difference from maximising financial returns that implies operators, and by extension consumers, can also benefit from the award of radio frequencies.

In France, the government has made improving 4G coverage a priority in renewing spectrum licences. The fact that mobile operators agreed to the new terms meant the government effectively raised investment to boost rural coverage, an important social objective. In other times, it might have staged an auction to reassign the frequencies.

Even Japan, where talk has circulated since last year about the introduction of auctions, might only add a financial element to its usual beauty contests, say observers.

A longtime advocate of beauty contests, the adoption of auctions always seemed like a major shift for the country.

The idea is thought to have the backing of Prime Minister Shinzo Abe’s office, but has been less warmly embraced by the Ministry of Internal Affairs and Communications, which is responsible for auction awards. Japan’s operators oppose the proposal.

The results of the government’s spectrum review are due this summer. Any financial element might only represent one part of the overall assessment, say observers, and could be for a fixed amount rather than competitive bids – a far cry from a full-blown auction.•