Australia Raises Value of Third Generation Cell Phone License
By Lisa Murray
quote.bloomberg.com
Canberra, May 9 (Bloomberg) -- Australia has raised the value
of high-speed wireless licenses it plans to sell in the fiscal
year starting July 1 by more than ten-fold.
The government raised the value of the licenses by A$2.6
billion, from ``substantially less than A$200 million'' it
expected to get six months ago, according to a treasury official.
The reevaluation comes after the U.K. reaped more than US$35
billion selling high-speed licenses, ten times expectations.
``Obviously we weren't budgeting for enough in terms of
revenue as we think we now should have,'' Treasurer Peter Costello
told reporters.
The U.K. auction of high speed wireless licenses, which ended
late April, left five winners that bid an unexpectedly high total
of 22.5 billion pounds (US$35.5 billion). The auction, which began
with 13 entrants and lasted two months, went through 149 rounds of
bidding. The results outstripped expectations, bringing in 10
times what the U.K. government had budgeted and the equivalent of
about 7 percent of one year's tax revenue.
Analysts at Macquarie Research Economics said that based on
the U.K. experience, the auction of the new telephony third
generation spectrum could raise up to A$10 billion in Australia.
Still, some analysts warn traders and investors will ignore
the spectrum sales in the surplus.
``It's not strictly an asset sale but it is a non-recurring
revenue source, a one-off,'' said David Bassanese, senior
economist with Macquarie Bank Ltd. in Sydney, before the budget
was released. ``Sure it's a surplus, but take out the spectrum
sales and what are you left with.''
About 8 million Australian have a cellular phone, and by 2002
half the population, or 9 million people, are forecast to own a
cell phone.
Earlier this year, the government auctioned wireless
spectrum, different from the new ``third generation'' spectrum,
and attracted total bids of A$1.32 billion. This auction, in the
1.8 gigahertz spectrum, also prompted the government to revise up
its valuation.
``The sale came in over A$1 billion and we didn't expect it
would raise that, so we revised up the valuation to what we
consider is a fair estimate,'' Costello told reporters. |
