High bids, huge plans for 3G, as stated in SSB upgrade.
Vendor financing will be necessary (Lucent/OneTel agreement said up to $20 billion in "Western Europe" which probably includes UK), so Q might participate in some way. Debates about "need" for 3G apparently are ended.
Vanessa Clark, Total Telecom
31 March 2000
The total bids for the five third generation spectrum licenses being auctioned in the U.K. topped the œ10 billion ($16 billion) mark on Friday.
Little over a month ago, analysts predicted the auctions would earn the government around œ2 billion in total, especially seeing as operators are looking at a multibillion pound investment in network build out.
In probably the understatement of the year, a statement from the U.K. Department of Trade and Industry, under whose auspices the auction is being held, said: "The DTI is very pleased with the way the auctions are going at the moment." The government department expects to make a lengthier statement on Monday.
Interestingly, today also saw the first sign of hesitation from one of the bidders. Crescent Wireless, backed by Global Crossing investors, was the first operator to request a waiver from a bidding round. Each operator has the right to request three waivers and two recess days.
Global Crossing was unavailable for comment at time of publishing. In the previous round Crescent had bid œ1,819,400,000 for license C, tying with Spectrumco, One.tel, Epsilon, Worldcom and TIW.
Apart from Vodafone aggressively chasing License B, it is still an open field, said Val Jervis, principal consultant at Reading, U.K.-based Netcom Consulting. "I am really surprised the bids have gone so high," she said.
Jervis is concerned that operators still have to spend about œ3 billion pounds of network build out and have effectively doubled the level of their investment. "I hope everyone has a sound business plan," she said.
At end of play on Friday, concluding the fourth week of the auction, the field looked as follows:
License A - Spectrumco œ2,101,200,000
License B - Vodafone œ2,228,400,000
License C - Worldcom œ1,879,500,000
License D - Telefonica œ1,893,100,000
License E - NTL Mobile œ1,952,500,000
For more detailed information on the auctions and previous rounds, refer to the auction website: www.spectrumauctions.gov.uk.
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