Vodafone Pacific Pty Ltd said it had lodged an application for 2.1 GHz spectrum licences, which will be used by the country's major carriers to deliver high-speed data services.

It will be competing with Hutchison Telecommunications Ltd which last night announced its intention to participate.

Cable & Wireless Optus Ltd and Telstra Corp Ltd are also expected to lodge applications before Monday's deadline.

The federal government is banking on a $2.6 billion windfall from the March auctions to prop up its budget surplus.

However, a decline in the telecommunications sector worldwide, a weak capital finance market and recent poor auction results point to a disappointing result for the government.

Vodafone, which is bidding for C&W Optus' mobile business via a deal with Hutchison, said today it hoped to buy 3G spectrum at the "right price".

"At the right price, the 2 GHz auction will provide an efficient and more cost effective means of delivering the best of global innovation to our customers," Vodafone Australia managing director Andrew Bissex said.

Hutchison said last night the auction would give it the chance to acquire additional spectrum on its high-speed data network without having to build additional infrastructure.

"This would provide us with greater flexibility to enhance our proposed network, but we will only acquire additional spectrum at a price consistent with our internal return targets," Hutchison managing director Barry Roberts-Thomson said.

C&W Optus chief executive Chris Anderson said yesterday the number two telco had set an upper limit on the spectrum's value and would walk away if bidding was too high.

"If they do (exceed that price) we will walk away and we won't pay them and an opportunity will be lost," he said.

The federal government is also hoping overseas telcos will join the bidding.

Applications must be lodged by Monday, February 12, 2001.

The auctions are scheduled for early March.

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