Report: U.K. Mobile License Race Tops $16B

LONDON (04/03/2000) - The bidding war for the five available third generation (3G) mobile phone licenses in the U.K. topped 10 billion pounds (US$15.9 billion) Friday, according to a report in today's Financial Times.

At the close of the 91st bidding round on Friday, the combined total of the top bids for the five 3G licenses had topped 10 billion pounds, and Crescent Wireless, a U.S. company, skipped a round, prompting speculation that the company would drop out. Each company is allowed to sit out three rounds before either bidding, or dropping out.

According to regulations, license A, with the largest radio spectrum allocation of the five 3G licenses, must be awarded to a newcomer to the U.K. mobile phone market, so the holders of the four second-generation GSM (global system for mobile communications) licenses, Vodafone AirTouch PLC, British Telecommunications PLC, Orange PLC and One2One PLC are all competing for license B instead, the paper said.

When the bidding closed Friday, the current offer for license B was 2.23 billion pounds.

The auction has already doubled what media and government officials speculated would be a 5 billion pound total for the licenses, and now the total is increasing by 1 billion pounds per day. The five winning companies must pay 50 percent of the fee to the U.K. treasury immediately, while the remainder can be spread out over ten years.

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