LONDON (04/03/2000) - Less than a month after the first bid was placed, the combined highest bids for the five third generation mobile communications licenses in the U.K. are approaching 11 billion pounds (US$17.5 billion).
At the end of the 95th 30-minute round of bidding -- the last for today -- the top bids for each of the five licenses, dubbed "A" through "E", totalled 10.9 billion pounds, with 11 companies still in the bidding.
Bidding will continue until all but one vendor drops out of the bidding for each license. The eventual winners of the five licenses will be entitled to use radio spectrum to offer third generation mobile communications services in the U.K.
License A -- with a larger spectrum allocation than the other four -- is reserved for a new player, excluding the U.K.'s four second-generation network operators, Vodafone AirTouch PLC, British Telecommunications PLC (BT), Orange PLC and One2One PLC, from the bidding. On the other hand, only these four may bid for License B. Bidding on the remaining three licenses is open to all.
At the end of the 95th round, the highest bidder for License A is Spanish telecommunications company Telefónica SA, with a bid of 2.21 billion pounds.
Vodafone holds the highest bid for the incumbents' license, License B, at 2.46 billion pounds. TIW UMTS Ltd. has the highest bid for License C, with 2.07 billion pounds. MCI WorldCom subsidiary Worldcom Wireless Ltd leads the bidding for License D with a bid of 2.12 billion pounds, and incumbent operator Orange rules the bidding for License E -- as it has done for the last four rounds -- with a bid of 2.08 billion pounds, according to information on the auction's official Web site.
U.S. company Crescent Wireless, which was backed by Global Crossing, today became the first company to drop out of the bidding, leaving the game in round 94 as the least expensive of the licenses hit 2 billion pounds. In round 95 it was 3GUK, the bidding vehicle of Irish incumbent telecommunications operator Eircom PLC, which folded.
The remaining companies bidding for the licenses are incumbents One2One and BT3G, the bidding arm of BT; Epsilon Tele.Com PLC; Australian phone company One.Tel; SpectrumCo, lead by Finland's mobile operator Sonera Corp. and NTL Mobile, subsidiary of cable company NTL.
When the auction began on March 6, the most expensive license opened at 170 million dollars, and both the media and government speculated that the combined total of the licenses would be less than 5 billion pounds.
The bidding will continue until there are only five remaining companies. Once the auction ends, the winning companies must immediately pay half the price to HM Treasury, and the remaining half must be paid over the next 10 years.
More information on the auction, including most recent bids and a round by round recap, can be found online at http://www.spectrumauctions.gov.uk/.