ROME-The Italian auction for five Universal Mobile Telecommunications System licenses began last Thursday. Italy is Europe’s largest cell-phone market, with six groups participating in the auction process, which is expected to raise around $21 billion.
The German UMTS auction, which ended in August, drew nearly $46 billion, and the Continent’s first UMTS auction-in the United Kingdom in April-raised about $34 billion.
Italy’s four incumbent operators are all participating in the third-generation auction. Telecom Italia Mobile, controlled by Telecom Italia, is the country’s largest operator with around 20 million subscribers. The second-largest operator by subscriber numbers is Omnitel Pronto Italia, backed by Vodafone Group plc, with about 12 million customers. Wind Telecomunicazion, which is majority owned by Italian utility Enel and in which France Telecom holds a stake, has about 3 million users.
Newcomer Blu is also participating. Blu began wireless operations in Italy in May and is owned 20 percent by British Telecommunications plc, 32 percent by Italian company Autostrade, with other smaller stakes held by international companies.
Press reports have said British Telecom is under pressure from Blu’s other shareholders to increase its stake to 51 percent. However, British Telecom is facing scrutiny from the financial community for its high debt. By waiting until after the auction to take majority control, it could share the cash burden of a license with the other shareholders. Reports stated Blu’s shareholders threatened to pull out of the auction if British Telecom did not increase its stake.
Two consortia without a mobile presence in Italy also are vying for a 3G license. IPSE 2000 is led by Spain’s Telefonica, with Sonera and Italian companies also holding stakes. In addition, Hong Kong-based Hutchison Whampoa is leading a consortium called Andala, with Italian companies also holding shares of that group.
