The 'mystery' applicants for Australia's third generation (3G) spectrum auction may drop out of the bidding wars early, according to an industry analyst.
"Overseas, the pure technology bidders dropped out early," said Ovum senior analyst, Jeremy Matthews. "They do not have a big infrastructure in Australia."
Seven applicants have shown their intentions for the 3G auction, five were no surprises - Telstra, Cable & Wireless Optus, AAPT (Telecom New Zealand), Vodafone and Hutchison Telecommunications - and two wildcards.
ArrayComm, which is bidding under the name of CKW Wireless, was founded in 1992 to commercialise on its wireless spectral efficiency technology, IntelliCell.
It has recently formed a partnership with Marconi's mobile division to develop third-generation (W-CDMA) wireless infrastructure for the universal mobile telecommunications system (UMTS).
Unlike traditional radio technologies used in 2G cellular systems that broadcast the same signal over the wireless cell to connect sender and receiver, IntelliCell enables 'smart antennas' to direct signals to and from individual users.
This approach mitigates radio interference that causes dropped calls and poor service, increases the number of subscribers that can be served in a fixed amount of radio spectrum, and enables faster data rates.
Qualcomm, which is registered with the auction under the name 3G Investments, pioneered code division multiple access (CDMA), a term used to refer to any of several protocols used in 2G and 3G wireless communications.
Matthews speculates these two spectrum contenders are bidding to ensure a contract with an existing operator.
"I think these two are looking to hook up with a potential overseas operator, but probably an existing Australian operator."
Geoff Johnson, research director for Gartner's Asia-Pacific research centre, agrees. "Obviously they are a bidding vehicle for someone else."
Hype surrounding OneTel, SingTel and NTT DoCoMo entering Australia's spectrum race did not eventuate.
However, Matthews said if SingTel's bid for Optus was successful, then it would automatically enter into contention.
The same theory applies to NTT; Johnson said he has been surprised they have not made an open bid for Optus, "but they do have an alliance with Hutchison, and may enter our market that way." (See page 13 for Hutchison, Vodafone deal).
Johnson said he was also surprised that there had been no bid by one carrier for a global wrap up of 3G services.
Matthews is unconvinced about NTT intentions, as he believes it has not made any serious moves about coming to Australia.
Both Matthews and Johnson doubt the spectrum will raise anywhere near $2.6 billion, the figure being flaunted by the government.
"There will be tears before bedtime," Johnson said.
Matthews said: "I think the auction will be a good start for Australia and put us out there with the other countries. Seven bids were more than I expected. Bidding in Australia certainly hasn't been as bad as in other countries; France only received two bids."
3G is being driven by cities with large populations, of more than 10 million, like Japan and China, which are due to start the rollout of the service this year.
Matthews said he thought delaying the spectrum auction in Australia will be beneficial in the long run, as it will give Australia a chance to see what happens in other countries and to put out services with latent demand.
He said Hong Kong and Singapore were following the same strategy. Both are expected to auction their spectrum this year.