WorldCom Drops Out as U.K. Auction Nears $30B

LONDON (04/13/2000) - MCI WorldCom Inc. has withdrawn from the auction for third-generation mobile licenses in the U.K., as the combined total of highest bids in the auction passed 18.5 billion [B] pounds (US$29.4 billion [B]) this morning.

WorldCom Wireless (UK) Limited, the bidding arm of the U.S. telecommunications giant, withdrew from the auction at the end of round 121, after failing to outbid NTL Mobile Ltd., the joint venture of France Telecom SA and cable company NTL, for license D. The company had not placed a bid for two rounds.

Now only seven of the original 13 bidders remain, according to the auction's official Web site. They are competing for the five 20-year 3G licenses 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 bits per second.

Of the remaining companies, TIW UMTS (UK) Ltd. -- a subsidiary of Canada's Telesystem International Wireless Inc. -- has held the high bid for License A since round 116. License A and B have the largest radio spectrum allocation, License A being reserved for newcomers to the U.K. telecom market, while License B is reserved for an incumbent. TIW's current holding bid is 3.9 billion [B] pounds.

Incumbent carrier Vodafone AirTouch PLC has led the bidding for License B, by far the most expensive of the Licenses, since round 112. BT3G, the bidding arm of fellow incumbent British Telecommunications PLC has been the only company challenging Vodafone for the license since the 78th round, but there is currently speculation that Vodafone may prevail for License B since BT3G suddenly changed to bidding for License C instead. Vodafone's high bid for License B is currently 4.55 billion [B] pounds.

Licenses C and D are still open races, with incumbent One2One PLC, Spain's Telefonica SA, and NTL Mobile openly competing for the two. Incumbent carrier Orange PLC has placed its focus completely on License E since the 79th round, with the occasional interruption by Telefonica or One2One.

The high bid for License C is currently Telefonica's 3.41 billion [B] pounds, NTL currently controls License D, at 3.29 billion [B] pounds, while License E is ruled by Orange, at 3.35 billion [B] pounds.

More information on the auction, including the most recent bids and a round by round recap, can be found on the Web at http://www.spectrumauctions.gov.uk/.

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