A consortium comprised of Telefonica, Orange and Sonera will join U.S.-based MCI WorldCom and 10 other groups in bidding for third-generation (3G) licenses in Germany. The auction is set to begin in early July.
The German regulator will sell 12 frequencies of radio spectrum to support Universal Mobile Telecommunications Services (UMTS) networks. Each frequency is expected to bring up to US$4.7 billion, and bidders are predicted to buy either two or three frequencies and bundle them together.
Other bidders include Germany’s four incumbent operators-E-Plus, Mannesmann Mobilfunk, T-Mobil and Viag Interkom-along with Mobilcom, Debitel, France’s Vivendi, Nets AG and Auditorium Investments.
The German auction will take place just months after Europe’s first 3G license auction in the United Kingdom. After eight weeks and 150 rounds, NTL Mobile said enough and dropped out of the U.K. government auction for five UMTS licenses. The withdrawal left only five bidders for the licenses, ending the auction that generated more than US$35 billion for the British government.
The survivors included the four U.K. incumbent operators-license B winner Vodafone AirTouch, which bid US$9.4 billion for its license; BT, winner of license C for US$6.3 billion; One 2 One, which bid US$6.3 billion for license D; and Orange 3G, winner of license E for US$6.4 billion.
The only foreign winner was Canada-based Telesystem International Wireless, which won license A for US$6.9 billion. License A was set aside by the government’s Radiocommunications Agency for a newcomer in hopes of stimulating increased competition in the domestic phone market. After the win, TIW announced a partnership with Hong Kong-based Hutchison Whompoa, which plans to operate as a mobile virtual network operator using TIW’s 3G network.
The U.K. auction began 6 March with 13 bidders vying for the five third-generation mobile spectrum licenses. As the bids quickly reached higher-than-anticipated levels, competitors dropped out, finding little chance of making money on such huge investments. By the final week, only six competitors remained, until NTL Mobile, a joint venture between NTL and France Telecom, finally relented.
“We entered the auction with a robust business plan for offering fixed and mobile services,” said Barclay Knapp, president and chief executive officer of NTL. “We still believe in that plan, but now believe that other strategies for achieving it offer higher and better rates of return for our stakeholders.”
The British government was pleased with the world’s first 3G spectrum auction and noted consumers in the United Kingdom would be among the first in the world to reap the benefits of 3G technology.
“The outcome of this auction supports the government’s commitment to early licensing of 3G and to increasing competition in the U.K. mobile telecoms market,” said Stephen Byers, U.K. secretary of state for trade and industry.
