The battle for the UK's third generation (3G) mobile phone licences has finally come to an end following NTL Mobile's withdrawal from the auction.
Stephen Byers, Secretary of State for Trade and Industry, announced the winning bids today in the wake of NTL Mobile's decision to call a recess day yesterday after round 149 of the auction.
NTL Mobile, which is jointly owned by cable company NTL and France Telecom, was the last in a number of contenders, including Crescent Wireless, Epsilon Tele.com and Telefonica, to pull out of the race. However, bids reached as high as £22.478bn, more than four times higher than expected prior to the auction.
| The 3G licence winners are: |
| Licence A - Canadian group TIW, which owns UK operator Dolphin, secured A for £4.38bn. Bidding for this licence, which offers the best range across the radio spectrum, was reserved for a new entrant into the UK market. |
| Licence B - Vodafone won the battle for B, which offers the highest bandwidth, with a £5.96bn bid. The UK mobile service provider beat off strong competition from BT. |
| Licence C - BT3G settled for a lower capacity licence with a £4.03bn bid. |
| Licence D - One 2 One, the UK mobile operator, made a £4.003bn bid. |
| Licence E - UK mobile operator Orange made a £4.09bn bid. |
In a statement, Byers said the outcome of the auction supported the government's commitment to make 3G licences available in the early stages of market development and boosted its aim of fostering increased competition in the UK mobile telecoms market.
"I welcome the introduction of a new entrant to the UK mobile telecoms market. This has been a direct result of the decision to auction five licences. This was the world's first 3G spectrum auction and UK consumers will be among the first in the world to reap the benefits of this exciting new technology," he said.
The 3G auction began on 6 March with 13 bidders aiming to become new licence holders. But as bids soared beyond expectations, rivals fell quickly by the wayside.
US group Crescent Wireless was the first casualty, dropping out during round 94, closely followed by 3GUK (owned by Irish telco Eircom) in round 95. SpectrumCo, which includes Virgin and Tesco, Epsilon Tele.com, a subsidiary of Japanese bank Nomura, WorldCom, One.tel, and Spanish group Telefonica all subsequently dropped out.
The licence bids have been widely criticised for being too high and analysts have warned that such costs could harm the UK's position as a leading player in the information society. There are also concerns that operators will have spent so much on licences that they will not be able to afford the cost of building networks, leaving consumers with higher charges.
But the government stands to receive a windfall from the bids and the five companies will also invest a further £2bn over the next three years developing the network to run universal mobile telephony services.
See also:
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13 Apr 2000
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