Switzerland Awards Four Licenses
In Shortened Mobile-Phone Auction
A WSJ.com News Roundup
ZURICH -- The remaining four contenders in Switzerland's auction of third-generation mobile-phone licenses on Wednesday each won a license for around the minimum price of 50 million Swiss francs ($29.2 million) each.
After a largely pro-forma auction, lasting three-and-a-half hours, state-controlled Swisscom AG, Spain's Telefonica SA, dSpeed and Orange each garnered as expected a Universal Mobile Telecommunications System, or UMTS, license. UMTS capability is expected to enable Internet-related mobile-phone applications in Switzerland by 2002.
Orange is a unit of France Telecom and dSpeed is controlled by Tele Danmark AS. And the United Kingdom's Vodafone Group PLC will become involved when it takes a 25% stake in Swisscom's mobile-phone arm in early 2001 for 4.5 billion francs.
The auction result was widely anticipated after the field of possible bidders shrunk to four from the original 10. The auction was first slated for November.
On Wednesday, only Orange exceeded the minimum price requirement with a 55-million-franc bid.
The Swiss government, which will receive 205 million francs for the licenses, saw its hopes of a billion-Swiss-franc deal dashed after it became clear that many telecoms groups were no longer willing to pay top dollar for third generation licenses, following costly auctions in Germany and the U.K. earlier this year.
In mid-November, the Swiss government postponed the auction -- and said it would investigate whether any companies illegally conspired ahead of time -- after the number of bidders fell to four.
The 15-year licenses had been expected to generate up to three billion francs.
Analysts have said repeatedly that some major telecoms players may still try to tap the Swiss market by striking an alliance with one of the license holders. Among those rumored to be interested are Deutsche Telekom AG's mobile unit, T-Mobile International AG; Telecom Italia Mobile SpA, a unit of Telecom Italia SpA; KPN Mobile NV; and Japan's NTT DoCoMo Inc.
Telefonica is seen as the most open to partnerships after earlier consortium partners dropped out of the Swiss race. |
