BT Talks Up Value During 3G Auction Time Out

LONDON (04/26/2000) - One company looks to be cracking while another is crowing confidently: the end may finally be in sight. On the same day that British Telecommunications PLC indicated it has set its sights on the less-expensive License C, NTL Mobile Ltd., the joint venture of France Telecom SA and cable company NTL Group Ltd., called a 24-hour time out in the auction for third-generation (3G) mobile licenses in the U.K.

As a result of NTL's action this morning, the auction will not be able to resume round 150 any earlier than tomorrow morning, according to the auction's official Web site. The auction now stands at round 149, with six companies bidding.

The combined high bids for the five licenses (A through E) on auction total 22.5 billion pounds (US$35.59 billion). Of the 13 companies originally bidding for the licenses, Telefonica SA was the last to drop out. [See "Telefonica Drops Out of U.K. Mobile Auction," April 18.]The 20-year, 3G licenses 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).

In the latest rounds of the auction, BT and NTL have been fighting for License C. NTL lost its high bid for the licence in round 148 to BT in the last round.

BT's high bid for License C is currently 4.03 billion pounds.

Speculation is that France Telecom SA may want to change tactics and pull NTL out of the auction in favor of focusing on getting a licence through the backdoor, namely by acquiring incumbent Orange PLC, the current high bidder for licence E at 4.1 billion pounds. Orange will be put on the block by parent company Mannesmann AG as a condition of the planned acquisition of that company by Vodafone AirTouch PLC.

Meanwhile, at a press conference today touting its planned broadband services [See "BT Details Broadband Services Launch Plan," April 26.], BT Chief Executive Peter Bonfield confidently predicted license victory for his company, and indicated BT may concede License B to rival Vodafone AirTouch PLC. "We'll get a good license. We'll get a realistic value," Bonfield said.

Though refusing to specifically comment on the ongoing auction, Bonfield brushed aside speculation among the gathered reporters that BT would limit its future growth if it failed to win the most expensive of the five licences. "A license is important in going forward," Bonfield stressed, adding, "We are value folks."

License A, reserved for new entrants to the U.K. mobile communications market, and License B, reserved for an incumbent operator, are the most sought-after of the licenses, as they also offer additional radio spectrum compared to the other three licenses, open to all comers.

When asked, Bonfield said that he didn't mind who ended up with License A. TIW UMTS (UK) Ltd., a subsidiary of Canada's TeleSystems International Wireless Inc., is the current high bidder for License A, with a bid of 4.38 billion pounds.

Vodafone has led the bidding for License B, since round 112. BT3G, the bidding arm of fellow incumbent BT, has been the only company challenging Vodafone for the license since the 78th round. Vodafone's high bid for License B is currently 5.96 billion pounds.

But BT has 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.

Incumbent One2One PLC has the current highest bid for License D, at 4 billion pounds.

More information on the auction, including the most recent bids and a round by round recap, can be found on the Web at

BT, in London, can be reached at +44-20-7356-5000, or at

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