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Bids total A$804.35m on day 1 of Australian 3G

date: 15th March 2001, source by: Total Telecom

The first day of the Australian government's auction of 3G spectrum on Thursday ended with total bids of A$804.35 million (US$398.5 million). Incumbent Telstra has so far bid the most with A$221.3 million.

The government expects to raise over A$2.6 billion by 30 June from a series of spectrum auctions and has set a reserve price of A$1.08 billion. However, its estimates were made in May last year before a global downturn in telecoms stocks, which may restrict capital spending.

Some of the bidders have already warned they will not pay the high prices paid in the U.K. and German 3G auctions, which are largely thought by analysts to have been much too high, leaving winning operators unable to fund the roll-out of their 3G networks. Optus chief executive Chris Anderson, for example, has said he is prepared to "walk away" if prices breach a certain pre-set target, The Wall Street Journal reported.

But the license winners may not necessarily use the spectrum themselves. Analysts believe Qualcomm, for example, is not interested in becoming an operator itself and may sell its spectrum or ally with an existing operator, the WSJ said. The company sold the 800 MHz spectrum it won in a 1998 Australian auction to AAPT.

Regulator the Australian Communications Authority (ACA) said that 32 of the 58 spectrum lots on auction in the 2GHz band had so far attracted bids and all six registered bidders had remained in the auction for round three on Friday.

There were originally seven bidders, but AAPT Ltd., the Australian subsidiary of Telecom Corp. of New Zealand, pulled out on Wednesday.

After day one, Telstra had bid A$221.3 million, Hutchison A$196.1 million, C&W Optus A$185.5 million, Qualcomm's 3G Investments A$185.5 million, Vodafone A$8 million and ArrayCommInc's CKW Wireless A$7.95 million. Successful bidders will be allocated 15-year licenses commencing in October 2002.

Spectrum has been restricted to 15 MHz of paired and 5 MHz of unpaired spectrum in state and territory capital cities per bidder, and 10 MHz of paired spectrum in regional areas.

 

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