Govt wants $280m in deposits from 3G bidders

date: 14th December 2000, source: smh.com.au

Potential bidders for third generation mobile phone spectrum will have to place a deposit of up to $280 million if they want to buy the maximum amount of spectrum available to a single carrier.

Mr John Grant, executive manager of Spectrum Marketing Group, part of the the Australian Communications Authority, said this amount would be refundable if a bidder withdrew from the auction, which is to take place in early March.

ACA is being advised by Deutsche Bank, the first time the Australian Government has hired an investment bank for a spectrum auction.

Deutsche's appointment does not preclude it from advising other local telephone carriers during the spectrum sale process, or assisting potential acquirers of the Cable & Wireless Optus businesses that are up for sale.

This has raised concerns about a potential conflict of interest as Deutsche could potentially advise a suitor for the Optus mobile business, which may also be bidding in the 3G spectrum auction, while it remains an adviser to the government body selling the spectrum. Under existing rules, possible 3G bidders do not have to reveal their identity, so it would not be publicly known who the potential bidders were and who was advising them.

"Part of our role is to bring consortia together," said Mr Duncan Adams, director of Deutsche Bank investment advisory. Mr Adams said Deutsche had sent out information packs to more than 200 organisations, including media groups John Fairfax Holdings and Publishing and Broadcasting Ltd, that could be interested in taking part in the auction.

Optus is understood to be looking at forming a consortium for the 3G auction.

The Federal Government has budgeted to take in $2.6 billion in proceeds from all spectrum sales this financial year. These proceeds will form a significant part of its planned surplus for this year's Budget.

Deutsche was appointed after it won a government tender for the advisory role.

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