Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: el paradisio who wrote (6329)	4/6/2000 2:19:00 PM
From: Dan Hamilton	Read Replies (1) \| Respond to of 11568

U.K. wireless spectrum bids top $20B, raising cost concerns The price of wide-band telecommunications spectrum in the U.K. that's needed to deliver a wide range of advanced wireless applications is seen as a benchmark to similar auctions scheduled to take place in the U.S. this summer. By Bob Brewin and Douglas F. Gray 04/06/2000 The price of wide-band telecommunications spectrum in the U.K. that's needed to deliver a wide range of advanced wireless applications topped $20 billion yesterday in the fourth week of a fiercely contested auction, raising affordability concerns among analysts and potential corporate users. The rich bids the U.K. spectrum auction has attracted also serves as a benchmark for the next-generation spectrum auction scheduled to take place in the U.S. this summer, with final bids expected to be much higher due to the swelling population of wireless users. The staggering prices for a commodity that governments once gave away for free also serves as a strong argument for the creation of national mega-carriers in the U.S. with the deep corporate resources required to fit the bill, analysts said. MCI WorldCom Inc. led the bidding yesterday in the U.K., offering $4.3 billion for the largest amount of spectrum on the block, with Vodafone Air Touch PLC offering $4.8 billion for a slightly smaller block of spectrum. This wireless version of high-stakes poker has already caused five companies to drop out of the bidding war, with eight companies ? all European or global communications powerhouses ? still hanging in. Brent Ostergaard, an analyst at Giga Information Group Inc. in Denmark, said the spectrum price war has reached the point where it has become "absurd . . . . By having this future revenue stream going from industry into the government, you're really taxing future users of these systems." Douglas Jaffrey Fields, vice president of the telecommunications unit of United Parcel Service of America Inc. ? the single largest cellular telecommunications user in the U.S. ? believes carriers may have priced themselves out of the market with such a bidding strategy for raw spectrum. UPS uses its extensive global telecommunications network to support its core business, delivery of what Fields described as "low margin" ground packages. Looking at the auction prices in the U.K., Fields said at those prices, "we can't get into broadband wireless data . . . . We just can't afford it." Alan Reiter, an analyst at Maryland-based Wireless Internet and Mobile Computing, said the multibillion-dollar U.K. spectrum auction provides a definite economic justification for the BellSouth Corp. and SBC Communications Inc. joint venture announced yesterday (see story) and the similar Bell Atlantic Corp./Vodafone deal. "To pay for spectrum, you're going to need a huge company," Reiter said, adding that these U.S. joint ventures may have been formed partly to provide the financial muscle needed to join in and survive the rich U.S. spectrum auction. Asked if he could come up with a valuation for the U.S. broadband spectrum, Reiter said he "couldn't even guess" but did say the prices would top the U.K. Gray reported on this story from the IDG News Service bureau in London.