Communications Minister Richard Alston said the government was hoping for vigorous bidding when the third generation (3G) spectrum auction started tomorrow.

However, he said consumers would still benefit if telecommunications companies paid less than the $2.6 billion estimated by the government in last year's budget.

“We have never specified in the budget provision precisely what we are going to get from the 3G auction which starts tomorrow,” Alston said in Sydney.

“But at the end of the day we are a pricetaker, we'll stand in the marketplace and hope there is vigorous bidding.”

Alston would not say whether the spectrum would be withdrawn if the reserve price was not met.

Analysts say the government is unlikely to receive more than $1 billion from the auction following a global revaluation of mobile phone spectrum.

Alston said the government was “in many ways you are hostage to the extent to which these technologies are in favor”.

“If the carriers actually pay less than they might have originally expected then that means they have more money in their pockets for a faster rollout,” he said.

“So at the end of the day I think customers will be the winners out of decision to go ahead.”

The aggregate reserve price for the auction has been set at $1.08 billion.

Seven applicants, including Telstra, have registered to take part.

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