Ofcom’s international benchmarking analysisOfcom’s international benchmarking analysis Executive...

© Frontier Economics Ltd, London.

Ofcom’s international benchmarking analysis ALF CONSULTATION FEBRUARY 2015

A REPORT FOR VODAFONE

April 2015

Non-Confidential April 2015 | Frontier Economics i

Contents

Ofcom’s international benchmarking analysis Executive summary 5

1 Introduction 9

2 Ofcom’s change in the treatment of 900 MHz benchmarks is not supported by evidence 13

2.1 There is no evidence of significant changes in commercial opportunities for LTE 900 since the August consultation ......... 13

2.2 The evidence indicates that the auction outcomes in Ireland are unlikely to underestimate true market value of 900 MHz spectrum .................................................................................. 19

3 Ofcom’s treatment of the 900 and 1800 MHz benchmarks is inconsistent 23

4 Conclusion 28

ii Frontier Economics | April 2015 Non-cConfidential

Tables & Figures STC

Ofcom’s international benchmarking analysis

Figure 1. The appropriate range for 900 MHz relative value 7

Figure 2. The appropriate range for the 1800 MHz relative value 8

Figure 3. Ofcom's updated view on the UK value of 900 and 1800 MHz spectrum 11

Figure 4. Ofcom’s revision of assessment in the 7 month period following the August 2014 consultation. 14

Figure 5. LTE roll-out across regions 15

Figure 6. Proportion of mobile devices with LTE800, LTE900 18

Figure 7. Ofcom's revision of the risk assessment of the Irish 900 MHz benchmark 21

Figure 8. Ofcom's estimates of the UK equivalent value of 900 MHz and 1800 MHz spectrum in the benchmark countries have fallen since the August 2014 consultation 24

Figure 9. Ofcom's inconsistent treatment of 900 and 1800 benchmarks 26

Non-Confidential April 2015 | Frontier Economics 3

STC Executive summary


Executive summary

Executive summary In February 2015, Ofcom published its latest consultation document on ALFs for 900 MHz and 1800 MHz spectrum1. This includes Ofcom’s revised approach to treating international benchmarking evidence from other EU auctions of 900 MHz and 1800 MHz spectrum. In summary, Ofcom’s final approach is broadly consistent with the methodology proposed by Frontier Economics2 and taking into account comments of other stakeholders received during previous consultations. Ofcom focusses on relative values from benchmark countries, using absolute values of 900 MHz and 1800 MHz spectrum only as a cross-check. Ofcom also revises its estimate of UK 800 value, which is an essential input into deriving the UK market value of 900 and 1800 MHz spectrum, see our separate submission on the UK 800 estimate3.

Nevertheless, some shortcomings in Ofcom’s methodology still remain, and these increase the risk of overestimating the true market value for 900 MHz and 1800 MHz spectrum in the UK.

• As already stated in our response August 2014 consultation4, the appropriate treatment of the available benchmarking evidence indicates that the results from the Austrian auction are likely to be a poor indication of relative market value of spectrum in the UK. This is because the estimated value of 900 MHz spectrum in Austria exceeds the value of 800 MHz spectrum, which is inconsistent with Ofcom’s position that the value of 800 MHz spectrum should be expected to be higher. Austria should therefore be given minimal or no weight when deriving the market value of spectrum in UK. This would be in line with the weight Ofcom attaches to Romania which is the only other benchmark country indicating that 900 MHz is more valuable than 800 MHz spectrum.

• Ofcom’s change in the treatment of 900 MHz benchmarks is not justified. Firstly, Ofcom’s decision to change its risk assessment on the key 900 MHz benchmarks from auctions that took place prior to 2012 because

1 Annual licence fees for 900 MHz and 1800 MHz spectrum: Provisional decision and further consultation, 19 February 2015. Available at http://stakeholders.ofcom.org.uk/consultations/annual-licence-fees-further-consultation/

2 Critique of Ofcom’s benchmarking analysis, Frontier Economics, January 2014. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/900-1800-mhz-fees/responses/Vodafone_Annex_4.pdf

3 An analysis of Ofcom’s candidate value for 800 MHz spectrum, Frontier Economics, April 2015

4 Ofcom’s updated international benchmarking analysis Frontier Economics, September 2014. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-900-MHz-1800-MHz/responses/Vodafone_Annex_2.pdf

6 Frontier Economics | April 2015 Non-cConfidential

Executive summary

of the greater commercial opportunities for LTE in the 900 MHz band is not supported by strong evidence. Secondly, there is no conclusive evidence that strategic bidding in the Irish auction may have led to an underestimate of the true market value of 900 MHz spectrum. We discuss this in more detail below.

• Ofcom adopts an inconsistent approach to estimating the UK value of 900 MHz and 1800 MHz spectrum. This leads to the value of 900 MHz spectrum being inappropriately high relative to the value of 1800 MHz spectrum. Taking into account the evolution of benchmark values since the last consultation in August 2014, the key inputs into Ofcom’s estimate have decreased for both 900 and 1800 MHz spectrum. It would therefore be appropriate for Ofcom to proportionally decrease its estimate of both 900 MHz and 1800 MHz spectrum. However, Ofcom adjusts only the value of 1800 MHz estimate, leaving 900 MHz value unchanged at the level proposed in August 2014. We also discuss this in more detail below.

Taking this into account, we continue to believe that the appropriate range for the relative value of 900 MHz spectrum in the UK is between Ireland (61%) and Spain (74%) ratios, with the appropriate value likely being closer to the 61% ratio from Ireland, which is a more reliable 900/800 benchmark5, see Figure 1 below.

While Ofcom’s current proposal is within what we consider to be the appropriate range for the relative 900 MHz value, its proposed 77%6 ratio is above the maximum of the range. There is thus a risk it could lead to overestimating the true market value of 900 MHz spectrum.

5 This value should be applied to the relevant comparator 800 UK value, i.e. excluding coverage

obligation and any co-existence costs.

6 In order to derive a consistent comparator with our recommended 61%, Ofcom’s proposed 900 MHz value of £23m per MHz has been divided by Ofcom’s estimate of UK 800 MHz value excluding coverage obligation and any co-existence costs.

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Introduction

1 Introduction In February 2015, Ofcom published its latest consultation document on ALFs for 900 MHz and 1800 MHz spectrum8. This includes Ofcom’s revised approach to treating international benchmarking evidence from other EU auctions of 900 MHz and 1800 MHz spectrum.

Ofcom’s high level approach to estimating the UK value of 900 MHz and 1800 MHz spectrum involves calculating the relative ratios of 900 MHz and 1800 MHz to 800 MHz spectrum derived from European auctions, applying these ratios to the estimated UK value of 800 MHz spectrum, and combining the resulting estimates to generate values for 900 MHz and 1800 MHz spectrum in the UK. Specifically, Ofcom’s approach can be described as a two-stage process.

• First, Ofcom generates the “UK equivalent value” of 900 MHz and 1800 MHz spectrum in each benchmark country. To calculate this, Ofcom considers the relationships between the values of 900 MHz and 1800 MHz spectrum and the value of 800 MHz spectrum in each benchmark country. Ofcom then applies these relationships to the UK value of 800 MHz spectrum.9 So, for example, if 900 MHz spectrum is worth 50% of 800 MHz spectrum in Ireland and the UK value of 800 MHz spectrum is £10m, then Ofcom would estimate the UK equivalent value of 900 MHz spectrum in Ireland to be £5m (50% x £10m) in Ireland.

• Second, Ofcom combines the UK equivalent values to calculate the UK value of 900 MHz and 1800 MHz spectrum. Ofcom does this by classifying some countries to be more relevant than others, thus implicitly calculating a weighted average value of spectrum across countries. In particular, it places more emphasis on “Tier 1” countries in its assessment of the UK equivalent values than “Tier 2” or “Tier 3” countries. It also makes a qualitative assessment of whether specific factors may mean that the UK equivalent value in a particular country may overestimate or underestimate UK value.

Since its August 2014 consultation, Ofcom has altered both the UK equivalent values that it uses and its approach to calculating the UK value. Ofcom has made three main changes that affect its approach. It has:

8 Annual licence fees for 900 MHz and 1800 MHz spectrum: Provisional decision and further

consultation, 19 February 2015. Available at http://stakeholders.ofcom.org.uk/consultations/annual-licence-fees-further-consultation/

9 Ofcom’s approach for 1800MHz relies on so called ‘distance method’ and is slightly more involved than for 900MHz, but in both cases the UK equivalent value increases and decreases with the UK value of 800MHz.


Introduction

1. substantially reduced the UK value of 800 MHz spectrum;

2. made marginal changes to the relative ratios of 900/800 (and 1800/800) MHz spectrum; and

3. changed its assessment of the risk of understatement or overstatement for some benchmarks.

The direction of the first two changes clearly indicates that the UK value of both 900 MHz and 1800 MHz spectrum should be lower than the figure that Ofcom proposed in August 2014. For instance, the UK value of 800 MHz spectrum is now 8% lower, while the 900/800 MHz ratio for Ireland (the lower bound for 900 values) has decreased by 10%.

In spite of these changes, Ofcom concludes that the UK market value of 900 MHz spectrum remains unchanged compared to its August 2014 proposal, while the UK value of 1800 MHz spectrum decreases by around 11%.

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Introduction

• Firstly, the new evidence for Ireland does not justify Ofcom’s current treatment of the 900 MHz values from these countries as potentially underestimating UK market value.

• Secondly, Ofcom’s interpretation of the available evidence is inconsistent across the 900 MHz and 1800 MHz spectrum bands.

Ofcom should therefore appropriately address these shortcomings, particularly given that the inconsistent treatment of 900 MHz and 1800 MHz values means that ALFs will not have the same impact on individual UK operators, due to their different spectrum holdings.

We outline the main shortcomings in Ofcom’s analysis in more detail next.


Ofcom’s change in the treatment of 900 MHz benchmarks is not supported by evidence

2 Ofcom’s change in the treatment of 900 MHz benchmarks is not supported by evidence Ofcom changes its risk assessment on the key 900 MHz benchmarks from auctions that took place prior to 2012 (Ireland, Denmark, Greece, Portugal and Spain) because of the greater commercial opportunities for LTE in the 900 MHz band. Ofcom now finds that these auctions risk understating the forward-looking value of 900 MHz spectrum in the UK.

For the Tier 1 country, Ireland, in particular, Ofcom finds that in addition to the greater commercial opportunities of LTE900, the 900 MHz price may underestimate the true market value of the spectrum due to the incumbents accommodating H3G in the 900 MHz band. 10

As shown below, these arguments are not supported by convincing evidence. Therefore, Ofcom cannot credibly rely on these to justify its current view that the UK market value of 900 MHz spectrum remains unchanged since the August 2014 consultation.

2.1 There is no evidence of significant changes in commercial opportunities for LTE 900 since the August consultation In the August 2014 consultation, Ofcom found limited evidence that there had been a change in the commercial expectations of LTE 900 since the benchmark auctions.11 Consequently, Ofcom did not adjust its interpretation of the benchmarks for this particular factor.

Ofcom has reconsidered its position in the February 2015 consultation. Ofcom now finds that wider use of 900 MHz band for LTE services is becoming a realistic possibility. Consequently, Ofcom considers that 900 MHz values observed in Ireland and in earlier awards in Denmark, Greece, Portugal and Spain, risk understating the forward-looking market value of 900 MHz spectrum in the UK, although they cannot be sure of the scale or likelihood of this risk.

10 See 3.54 (b), Annual licence fees for 900 MHz and 1800 MHz spectrum, Provisional decision and

further consultation, 19 February 2015. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-further-consultation/summary/alf-further-consultation.pdf

11 See A7.80-A7.82, Annexe 7, Annual licence fees for 900 MHz and 1800 MHz spectrum, Further consultation, 1 August 2014. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-900-MHz-1800-MHz/annexes/Annexes_1-7.pdf

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Secondly, even if Ofcom does not accept that expectations around LTE900 deployment may have been overly optimistic at the time of the benchmark auctions (thus overestimating the true value of 900 MHz spectrum today), Ofcom should acknowledge that the evidence available since the last consultation cannot be considered as sufficiently strong to justify a substantial change in the assessment of 900 MHz benchmarking evidence.

This is especially true for Ireland where the change in Ofcom’s risk assessment has a material impact on the lump sum value of 900 MHz spectrum.

Ofcom considers that the Irish auction may understate UK market value because important developments relating to increases in LTE900 opportunities took place after the Irish auction. Consequently, Ofcom finds that the auction would underestimate the current value of the 900 MHz in Ireland and the UK. We therefore show next that the expectations around LTE900 are unlikely to have changed between August 2014 and today in:

Ireland and the UK in particular; and

Europe in general.

[ ]



Unchanged LTE expectations in Ireland

As Ofcom points out, there are currently no indications of imminent LTE900 rollout in Ireland.12 It is reasonable to expect that the Irish operators would have formed expectations about the commercial opportunities of 900 MHz spectrum in the country when the auction took place in 2012, and that they reflected these expectations in their valuations when bidding for 900 MHz spectrum in the auction.

Given that there does not seem to be any evidence to indicate a change in these expectations in Ireland, and none is provided by Ofcom, as indicated by the fact that there is still no imminent LTE900 roll-out almost three years after the auction, it is reasonable to consider that the expectations factored in at the time of the auction remain largely unchanged today. The valuation assigned to 900 MHz spectrum is therefore also reflective of the value in Ireland today.

Unchanged LTE expectations in the UK

Even in the UK, there have been no changes in the expectations relating to LTE900 roll-out. The only UK operators that hold 900 MHz spectrum are Vodafone and O2 and we understand that neither is likely to roll-out LTE900 in the near-future for the following reasons:

• 900 MHz spectrum provides a degree of coverage that cannot be provided on 3G at 2100 MHz, and any premature removal of 2G/3G functionality in 900 MHz band (through re-refarming) could negatively affect 3G customer experience;

• 2G technology is an inefficient and thus, relatively heavy, user of spectrum. Given that the quantity of 900 MHz spectrum held by Vodafone/Telefonica O2 is relatively small at 2x17.5 MHz, it would make little financial sense to add-on 4G capacity in a separate band, since the increased data throughput from small carriers is also small; and

• The holding of 900MHz spectrum between Vodafone and Telefonica is fragmented rather than contiguous, making it more difficult to roll out LTE.

All these factors inhibit any aggressive timetabling of future LTE900 in the UK, and by extension, in Europe.

12 See A9.26, Annexe 9, Annual licence fees for 900 MHz and 1800 MHz spectrum, Further

consultation, 1 August 2014. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-further-consultation/annexes/Annexes_9-11.pdf



Unchanged LTE900 expectations in Europe

Ofcom draws general conclusions about the commercial opportunities related to LTE900 based on the roll-out of LTE900 by non-incumbent operators in Romania, Netherlands, Slovenia and Norway and the increase in availability of LTE900 compatible devices.

It is incorrect to rely on data from only these four countries as evidence of a European-wide trend of LTE900 deployment, especially because the roll-outs in two of the four countries were for operator-specific reasons rather than because of the intrinsic value of 900 MHz spectrum. Specifically:

• Romania- RCS&RDS only have 900 MHz spectrum in the sub-1 GHz band. Consequently, if they had to roll-out LTE, 900 MHz would be their only choice. Therefore, any LTE900 roll-out plans are more likely the result of necessity rather than evidence of increasing commercial opportunities.

• The Netherlands- T-Mobile has announced that it will use 900MHz to boost its LTE coverage in the Netherlands to achieve national coverage.13 However, this too comes from necessity rather than an increase in commercial opportunities. T-Mobile has not managed to secure 800 MHz spectrum in the 4G auction due to 2x10 MHz spectrum being reserved for a new entrant. Therefore, T-Mobile has no choice but to use the 900 MHz band to increase LTE coverage.

Moreover, there appears to be no evidence in the public domain of any imminent LTE900 rollout plans in either Slovenia or Norway. In fact, as was seen in Figure 5 above, LTE roll-out on 900 MHz has not been significant in Europe, and has been confined primarily to the 800 MHz, 1800 MHz and 2600 MHz bands.

Ofcom also argues that there has been an increase in the availability of LTE900-compatible devices since its August 2012 assessment for the 1800 MHz license variation decision.14

For instance, the number of LTE900 devices available has increased from 58 in March 2013 to 425 in October 2013, as illustrated by the increasing trend in

13 “T-Mobile Netherlands will use 900MHz spectrum to improve 4G coverage”, Telegeography, 10

September 2014/ Available at:

https://www.telegeography.com/products/commsupdate/articles/2014/09/10/t-mobile-netherlands-will-use-900mhz-spectrum-to-improve-4g-coverage/

14 See A9.24, Annex 9, Table 2, Annual licence fees for 900 MHz and 1800 MHz spectrum: Provisional decision and further consultation, 19 February 2015. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-further-consultation/annexes/Annexes_9-11.pdf

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Europe because LTE900 deployment in non-European markets has been more extensive, and device manufacturers will not generally add additional band capability that is not required as this adds to the device cost.

It is therefore unclear why Ofcom has revised its expectations of the commercial opportunities of LTE900 in the UK and Europe.

2.2 The evidence indicates that the auction outcomes in Ireland are unlikely to underestimate true market value of 900 MHz spectrum In the August 2014 consultation, Ofcom came to a view that the 900/800 MHz ratio from the Irish auction is likely to be overestimated because:

there may have been strategic bidding (by H3G) in the 900 MHz band that pushed 900 value above the true market value in Ireland; and

this may have resulted in budget constraints for bidding in 800 MHz, which may in turn have resulted in 800 values below the true market value in Ireland.

However, because of the absence of clear supporting evidence on the matter, Ofcom was unable to reach a firm view as to whether H3G’s price-driving behaviour occurred or not.16

Developments since August 2014

H3G responded to the August consultation by saying that the relative value for 900 MHz spectrum with respect to 800 MHz spectrum was affected by the competition for 800 MHz being fiercer than that for 900 MHz spectrum. This in turn was driven by a combination of the relative abundance of 900 MHz spectrum and the design of the auction.

According to H3G, incumbent operators generally need 2x10 MHz of either 800 MHz or 900 MHz to provide the coverage or capacity necessary to serve their customer base. There were 2x30 MHz of 800 MHz spectrum and 2x35 MHz of 900 MHz spectrum. H3G claims that each of the other three operators bid for 2x10 of the 900 MHz spectrum leaving 2x5 MHz for H3G, which was exactly the quantity a small player like H3G needed to serve its own customer base. Furthermore, the design of the auction meant that the incumbents’ attempts at expanding their 900 MHz holdings beyond 2x10 MHz would have reduced their ability to bid for 800 MHz spectrum.

16 A8.167, Annexe 8, Annual licence fees for 900 MHz and 1800 MHz spectrum, Further consultation,

1 August 2014. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-900-MHz-1800-MHz/annexes/Annex_8.pdf



H3G therefore argued that these factors led to relatively higher prices of 800 MHz compared to the 900 MHz band. However, no actual evidence was provided by H3G to prove its hypothesis that these factors had indeed driven the outcome of the auction. Furthermore, H3G did not address or provide evidence against the possibility of their strategic bidding in the 900 MHz band.

In the February 2015 consultation, Ofcom has taken H3G’s response into account. Ofcom correctly recognizes weaknesses in H3G’s arguments to support the alleged less aggressive bidding for 900 MHz spectrum:17

the 900 MHz spectrum cap applied only to time slice 1 (up until June 2015), so operators were free to bid for more than 2x10 MHz spectrum under time slice 2 (fifteen year licence);

if 900 MHz spectrum was viewed as a close substitute for 800 MHz LTE, they would have the incentive to bid as aggressively for additional 900 MHz spectrum; and

the prices paid in the auction indicate competitive outcomes across all bands.

At the same time, Ofcom seems to accept H3G’s arguments because it has revised its August 2014 view on the potential risks of under/overstatements of the Irish benchmark. Ofcom still continues to find a risk of overstatement due to the possibility of strategic bidding, but now also finds that there is a risk that the Irish auction understates the market value of 900 MHz and so, the 900/800 ratio.

Ofcom has therefore found that there is a risk that the 900 MHz price could understate or overstate the market value in Ireland, although they cannot be sure of the likelihood or scale of this risk. Ofcom’s revision of the assessment of risk is summarised in Figure 7 below.

17 A8.345, Annexe 8, Annual licence fees for 900 MHz and 1800 MHz spectrum, Further consultation,

1 August 2014. Available at http://stakeholders.ofcom.org.uk/binaries/consultations/annual-licence-fees-900-MHz-1800-MHz/annexes/Annex_8.pdf

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Ofcom’s treatment of the 900 and 1800 MHz benchmarks is inconsistent

3 Ofcom’s treatment of the 900 and 1800 MHz benchmarks is inconsistent Since its August 2014 consultation, Ofcom’s estimates of the UK equivalent value of both 900 MHz and 1800 MHz spectrum have fallen for all benchmark countries, as shown in Figure 8.19

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Ofcom’s assessment of the value of spectrum in the UK.

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These changes have occurred because Ofcom has reduced its estimate of the value of 800MHz spectrum in the UK from £36m to £33m. This affects the UK equivalent value for each benchmark country, which is calculated by applying the relationship between the value of 900/1800 MHz and 800 MHz spectrum to the UK value of 800 MHz spectrum. The UK equivalent values of 900 MHz and 1800 MHz spectrum therefore decrease as the UK value of 800 MHz spectrum decreases.

In line with these changes, Ofcom has reduced its estimate of the UK value of 1800 MHz spectrum from £14m to £13m. However, it has not changed its estimate of the UK value of 900 MHz spectrum. Ofcom’s approach is therefore inconsistent across the 900 MHz and 1800 MHz bands.

Ofcom’s approach to deriving UK market value of 900 MHz and 1800 MHz spectrum can be described as a three stage process:

stage 1: Ofcom considers countries that it believes provide the most reliable indicators of UK spectrum value, which it labels Tier 1 countries, and estimates the implied value of spectrum in the UK;

stage 2: Ofcom takes into account evidence from less reliable indicators of UK spectrum value – Tier 2 countries – and determines whether these should have an impact on its estimate from stage 1; and

stage 3: Ofcom considers Tier 3 countries, which it believes are unlikely to provide reliable evidence of UK spectrum value, and determines whether these should have an impact on its estimate from stage 2.

Ofcom’s approach differs significantly for 900 MHz and 1800 MHz spectrum at stage 1. For both bands, Ofcom takes the view that the UK value of spectrum could lie half way between the lowest Tier 1 value and the average of the Tier 1 values (based on a conservative approach). This implies a value of £23m for 900 MHz spectrum and £14.6m for 1800 MHz spectrum.

However, Ofcom then significantly reduces its estimate of the UK value of 1800 MHz spectrum based on its view that one of the four Tier 1 observations – Ireland – may overstate UK value. In particular, Ofcom decreases its estimate for 1800 MHz from £14.6m to £13m, which is a reduction of 11%. This results in three quarters of the Tier 1 observations being greater than Ofcom’s estimate of UK value.

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contrast, Ofcom maintains its estimate of the UK of 900 MHz spectrum value from the August 2014 consultation, even though the set of Tier 1 countries remains the same and all of the UK equivalent values in this group have fallen.

Overall, Ofcom has adopted an inconsistent approach to estimating the UK value of 900 MHz and 1800 MHz spectrum. This leads to the value of 900 MHz spectrum being inappropriately high relative to the value of 1800 MHz spectrum.


Conclusion

4 Conclusion Ofcom’s methodology for evaluating international benchmarking evidence approach is broadly consistent with our preferred approach, by focusing on relative values the EU auctions and using absolute values of 900 MHz and 1800 MHz spectrum only as a cross-check.

However, Ofcom’s application of the benchmarking methodology and the interpretation of the evidence available are not internally consistent and risks overestimating the true market value of 900 and 1800 MHz spectrum in the UK. In particular:

Ofcom still puts too much weight on the Austrian benchmark which we consider to be a poor indication of relative market value of spectrum in the UK;

Ofcom’s decision to change its risk assessment on the key 900 MHz benchmarks because of the greater commercial opportunities for LTE in the 900 MHz band is not supported by sufficient evidence;

Ofcom’s decision to change its assessment of the risk of strategic bidding in the Irish auction is not supported by sufficient evidence; and

Ofcom’s treatment of 900 and 1800 MHz spectrum is internally inconsistent.

As a result, Ofcom’s proposed ALF values risk overestimating the true market value of spectrum in the UK, in particular in relation to 900 MHz spectrum.

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