DP3214 The Biggest Auction Ever: The Sale of the British 3G Telecom Licences

Author(s): Kenneth Binmore, Paul Klemperer
Publication Date: February 2002
Keyword(s): 3G, auctions, Bidding, mobile phones, spectrum auctions, telecommunications, UMTS
JEL(s): D44, L96
Programme Areas: Public Economics, Financial Economics, Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3214

This paper reviews the part played by economists in organizing the British third-generation mobile-phone licence auction that concluded on 27 April 2000. It raised £22½ billion ($34 billion or 2½ % of GNP) and was widely described at the time as the biggest auction ever. We discuss the merits of auctions versus ?beauty contests?, the aims of the auction, the problems we faced, the auction designs we considered, and the mistakes that were made.