Examination of Witnesses (Questions 140
- 143)
WEDNESDAY 5 DECEMBER 2001
MR DAVID
HENDON
140. I understand that. Getting the whole thing
lodged, a net gain to the taxpayer of 40 pence is likely to be
seen as less of a success than getting a net gain on 22 billion.
(Mr Hendon) From the point of view of the taxpayer
but from our point of view this was the third part of the third
objective.
141. The third part of the third objective.
The interests of the taxpayer were so low down your order of priority
then, were they?
(Mr Hendon) As I said just now, it was the third part
of the third objective because the principal objective was to
get the spectrum exploited economically to generate wealth for
the country. We wanted these services to be available to consumers.
We wanted businesses to be able to make equipment and sell services
using 3G. We wanted to put UK companies in a position of being
able to go into other countries and exploit the same technology.
The fair return for the taxpayer in the objectives of the auction
announced by the Minister in Parliament was part of the picture
and 40 pence would not have been a fair return for the taxpayer,
but it was not the primary consideration.
Mr Steinberg
142. This is a question purely because I do
not understand the technology at all, I am a total layman. When
we have talked about the cost that may well be passed on to the
consumer because of the investment that has been made, purely
as a layman, presumably the technology that has got to be developed
has to be by the manufacturers of the equipment, people like Siemens
and Nokia and—what I have got—Ericsson? Presumably
they are the ones who will have to invest but why should Vodafone
and BT Cellnet have to have any more investment in technology,
they have got the frequency and it is the other people who have
got to work on the frequency?
(Mr Hendon) Yes, but all they have got from us is
a bit of paper which says they are allowed to transmit on that
frequency. They have got to build the network that will transmit
on that frequency and that network involves transmitters and they
have to build infrastructure to connect the transmitters together
and switches to divert the calls to the transmitters. It is a
big, expensive job. And they have to persuade people to let them
put their aerials on masts.
143. People like Ericsson and Siemens and Nokia,
they are going to be keen to get on it.
(Mr Hendon) They develop those things and then they
sell them to people.
144. Exactly. They are on an absolute winner.
(Mr Hendon) Everyone makes money out of it.
Mr Steinberg: Exactly.
Chairman: Well, Mr Hendon, thank you very much,
it has been a very interesting discussion on the biggest ever
transfer from the public to private sector, an auction that raised
£22 billion, and I suppose we must congratulate you. Thank
you for your evidence.
Mr Steinberg: You suppose, Chairman.
Chairman: We will leave that on one side, thank
you very much.
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