Thomas Wehmeier, a principal analyst at Informa Telecoms and Media said it is unlikely that the bidding will approach anywhere near the 3G windfall, but added that the government's figure appears to be a reasonable expectation.
"It's fair to say we're expecting the amount raised to represent just a fraction of the record £22.5 billion spent during the 3G licensing round in April 2000," he said.
"We have to remember that those were exceptional times, before the dotcom bubble burst and at the height of hype around mobile. The industry will be much more cautious this time around, not least because of the weak economy and the declining revenues that many operators are suffering in the UK and across Europe."
Wehmeier added that the auction of 4G services so soon after EE's launch of 4G in late October was a positive step forward for the mobile market in the UK.
"As far as the UK's mobile operators are concerned, this can't happen soon enough. Despite the encouraging signs we've seen since EE went live, the UK is still lagging far and away behind the world's most advanced 4G markets," he said.
"But that's not to say that we don't expect to see a marked acceleration in the pace of 4G adoption in the UK next year. By that point, most of the high-end flagship phones on sale in the UK will support 4G technology and we can expect to see some pretty competitive pricing as the markets kicks into life."
To date EE's 4G service has proved controversial with some complaining over pricing and data allowances, although the firm itself claims customers are seeing speeds of 30Mbit/s in some circumstances. µ
This article was originally published on V3.
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