13 line up for UK's 3G networks auction

Electronics Times, Jan 17, 2000

The government looks set to beat its target of raising about #1.5bn from the sale of licences to operate third generation (3G) mobile networks as 13 bidders, some with very deep pockets, indicated their participation.

The licence earmarked for a newcomer, and which will offer the broadest spectrum range, could go for well over #1bn as some of the world's largest conglomerates decided to enter the fray.

Perhaps the biggest surprise is that UK media groups such as Carlton and United News & Media (Electronic Times' parent company) or telecoms operator Energis did not bid.

The licences will be awarded in June, which means the UK could be one of the first to start operating UMTS. Recent industry estimates are that each winner will have to spend #1.5bn to build up its UMTS network, although any winner not currently operating a mobile network - such as BTCellnet, Orange, one2one and Vodafone - will be allowed to `piggyback' on to the existing infrastructure for a limited period.

BT will bid through subsidiary BT3G, while Mannesmann-owned Orange has Orange 3G. Vodafone and Deutsche Telekom-owned one2one are joined by nine other bidders. The most intriguing of these links Virgin Group, Tesco, EMI, telecom operators Nextel and Sonera and a group of venture capital funds such as George Soros's Quantum Fund. Analysts are predicting that this consortium will have the deepest pockets to win the fifth licence.

Other bidders are Telefonica, WorldCom and cable group NTL linked with major shareholder France Telecom, Australian group OneTel Global, Global Crossing under the name Crescent Wireless and Japanese finance house Nomura as Epsilon Tele.Com.