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ITU chief criticised handling of 3G auctions
November 20, 2002
Yoshio Utsumi, secretary general of ITU, last week criticised the
handling of 3G spectrum auction in Britain and Germany, and believes
this has contributed to the problems of the technology industry
in Europe. "It is the same as a very, very heavy targeted tax on
the industry," Utsumi said. He explained the problem was not the
auction, but the misuse of the money collected from the auctions.
The money should have been spent in the IT sector and if it did,
the industry would not have suffered so much.
Money raised from the 3G auctions in Britain ($35.7 billion) and
Germany ($50.8 billion) were the most in Europe. At that time, the
operators were willing to pay high prices for the licenses believing
there would be strong demand for 3G mobile services. Since then,
amid doubts over demand for 3G and economic problems, operators
believe they have over spent on the licenses.
The two governments have refused to cut the prices paid for the
licenses and so forced the operators to cut spending, leading to
a slow down in the industry.
"In the case of BT, they invested overseas but were obliged to
sell those investments to improve their financial situation. BT
also couldn't make further investments (in equipment) then the manufacturers
didn't get money."
Utsumi did not place all blame on the governments for the industry's
problem. "Besides that, the financial market overestimated the future
of dot-com companies and suddenly realized their over-estimation
therefore, in my opinion, it is not only the failure of the free
market but also the failure of government policy."
He said the IT industry will in recover in the future.
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3G Motorola A920
