3G Mobile Auction Finally Ends at $35B

LONDON (04/27/2000) - After almost eight weeks of sky-rocketing bidding for five third-generation (3G) mobile spectrum licenses in the U.K., the winners have finally emerged, netting the U.K. government 22.48 billion pounds (US$35.43 billion) in the process.

License A went to TIW UMTS (UK) Ltd., a subsidiary of Canada's TeleSystems International Wireless Inc., for 4.38 billion pounds. License B was won by Vodafone AirTouch PLC for 5.96 billion pounds. British Telecommunications PLC bought License C for 4.03 billion pounds. License D was won by One2One PLC for 4 billion pounds. Orange PLC nailed down License D at 4.1 billion pounds.

After calling a 24-hour time out yesterday, NTL Mobile Ltd., the joint venture of France Telecom SA and cable company NTL Group Ltd., pulled out of the auction, leaving the spoils to the winners after 150 rounds. [See "BT Talks Up Value During 3G Auction Time Out," April 26.]Stephen Byers, secretary of state for Trade and Industry, officially announced the winners in the 3G mobile spectrum licence auction this morning in a statement.

The 20-year 3G licenses (Licenses A through E) will allow the telecommunication companies to operate networks based on the UMTS (Universal Mobile Telecommunications System) standard. In addition to voice, the 3G networks are designed to provide data rates of up to 2M bps (bits per second).

3G has the potential to open up full scale, multimedia access to millions of people, giving 3G users Internet access with the ability to download e-mail messages, music and pictures as well as hold video conferences, Byers said in the statement.

"This was the world's first 3G spectrum auction and U.K. consumers will be among the first in the world to reap the benefits of this exciting new technology. The outcome of this auction is good news for business, the consumer, the economy, and the taxpayer," Byers said.

Licenses A and B were the most sought-after of the licenses, as they offer wider radio spectrum than the other three licenses, which were open to bid by all comers. License A was reserved for new entrants to the U.K. mobile communications market, and License B was reserved for an incumbent operator.

Incumbent BT, through its bidding arm BT3G, had been jumping between bidding for License B and License C since WorldCom Wireless (UK) Ltd., the bidding arm of the U.S. telecommunications giant MCI WorldCom Inc., dropped out. Prior to WorldCom dropping out, BT3G had been devoting 100 percent of its attention to license B.

BT Chief Executive Peter Bonfield yesterday indicated that the company had decided to settle for License C. The company quickly released a statement trumpeting its license win. "By winning Licence C at a substantial discount to the price paid for Licence B, BT has minimized the overall cost of bringing 3G mobile to its customers without compromising the range or quality of its services," BT said.

The Radio Communications Agency, in London, can be contacted +44-20-7215-5000, or at http://www.radio.gov.uk/. More information on the auction can be found on the Web at http://www.spectrumauctions.gov.uk/. BT, in London, can be reached at +44-20-7356-5000, or at http://www.bt.com/.

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