Bristol testbed company wins 3G licence

date: 2 September 2000

The company that tested the technology at its Bristol headquarters for the new generation of mobile phones has won one of the five licences on offer from the Government.

All four of the current operators - Vodafone, BT Cellnet, One2One and Orange sucured a licence, and will be joined by Canadian company TIW which secured licence A, which was the best licence on offer and had been reserved for a newcomer to the UK.

The bids totalled £22bn, and Orange's winning bid was £4.09bn.

Trade and Industry Secretary Stephen Byers said the third generation - also known as 3G - services would "transform everyday life" and would help position Britain at the head of e-commerce.

"This was the world's first 3G spectrum auction and consumers will be among the first in the world to reap the benefits of this exciting new technology." he said.

The Department of Trade and Industry said Vodafone must complete its sale of Orange - a condition of the company's merger with Germany's Mannesmann - before it receives its third generation licence.

Tressan McCarthy, telecoms analyst at Credit Lyonnais Securities Europe, said the first reaction was "relief that they're over," but added "we're waiting for some kind of pointers from the companies to justify the prices paid."

Another analyst who asked not to be named said the situation was very unclear adding: "The companies have got to explain themselves." At this stage, he said, "the valuations are based on hopes and expectations".

Orange's Chief Executive Officer Hans Snook said "We are delighted to have acquired a UK third generation licence. It has been a hotly contested auction, at the end of which the prices paid have fulfilled our expectations. The immediate winners are the government and the successful bidders. The ultimate winners, however, will be customers and investors.

"UMTS [Univeral Mobile Telecommuncations System] is an evolutionary step in the world of wirefree communications. It complements our existing network strategy, which involves providing 3G-type services on our existing 2G and 2.5G network.

"Of all the UK mobile operators we believe Orange is in the best position to exploit the potential of UMTS, not just rapidly and economically, but also as a seamless progression of our existing strategy.

"We will be delivering a range of advanced multimedia, life services which include: high speed internet access; e-commerce services such as interactive home shopping, online booking and location-based information and entertainment services. In addition, mobile videoconferencing, and the ability to download movie clips, the latest soundtracks and sports highlights, direct to the consumer, all on the move.

Orange has long foreseen wirefree displacing fixed line communications, not just for the great majority of voice traffic but also for the rapidly increasing share of data and internet traffic. Orange is playing a leading role in driving this displacement, and UMTS will assist us going forward."

top