Total Price: £21.94 billion

Winners:
- TIW (£4,384,700,000)
- One2One (£4,003,600,000)
- Orange (£4,095,000,000)
- Vodafone (£5,964,000,000 )
- BT Cellnet (£4,030,100,000)

Radiocommunications Agency

Stephen Byers, Secretary of State for Trade & Industry, today announced the provisional licence winners in the third generation (3G) mobile spectrum licence auction.

The UK 3G spectrum auction ended today after seven weeks - 150 bidding rounds. All five licences were sold.

The winner of the largest licence, open only to new entrants, was TIW, a Canadian company in which Hutchison Whampoa has a stake. It paid £4.38bn for the licence. The next largest licence, open to any bidder- Vodafone AirTouch paid £5.96bn. British Telecommunications, One-2-One and Orange all paid a little more than £4bn each for the three remaining licences. The bids totalled £22bn.

Patricia Hewitt, Minister for E-commerce and Small Business today confirmed that the 3G mobile auction will start on Monday 6 March.

The Government will auction five licences for blocks of spectrum for 3G services. The four existing operators, BT (3G) Limited, One2One Personal Communications Limited, Orange 3G Limited, Vodafone Limited may not bid for the licence with the largest amount of spectrum which is reserved for a new entrant to the UK mobile telecoms market. Reserve prices for the five licences total £500 million.

The design of the auction is a modified version of that used by the US Federal Communications Commission. Bids will be submitted by fax with bidding for the licences taking place in a sequence of rounds. In each round participants bid simultaneously for any one of the five licences (except that existing operators may not bid for the licence reserved for new entrants). At the end of each round bidders are advised of all bids made. These details will also be published on the auction website (www.spectrumauctions.gov.uk). The holder of the highest bid on each licence is required to remain inactive in the following round. The auction, which may last several weeks, will end when no further bids are received.

Patricia Hewitt, the Small Business and E-commerce Minister today named the companies who have applied to bid in Europe’s first auction for third generation mobile telecommunication licences in March.

Ms Hewitt said: "Thirteen groups have applied to bid in Europe’s first ever 3G auction. I am delighted that nine potential new entrants to the UK mobile telecoms market see the opportunities and have applied to take part, including interest from outside the traditional telecoms market.

The Government will auction five licences for blocks of spectrum for 3G services. The licence with the largest amount of spectrum is reserved for a new entrant to the UK mobile telecoms market. Reserve prices for the five licences total £500 million. Applicants which qualify to take part in the auction, and the auction start date, will be confirmed in February, following the completion of checks on applications.

Applications were submitted by: 3G (UK) Limited, BT(3G) Limited, Crescent Wireless Limited, Epsilon Tele.Com PLC, NTL Mobile Limited, One.Tel Global Wireless Limited, One2One Personal Communications Limited, Orange 3G Limited, SpectrumCo Limited, TIW UMTS (UK) Limited, Telefonica UK Limited, Vodafone Limited, WorldCom Wireless (UK) Limited

Competition in the UK mobile telecommunications market is set to increase as a decision to auction five third generation mobile telephone licences, with a larger licence reserved for a new entrant, was confirmed by DTI Telecoms Minister, Michael Wills today. In paving the way for at least one new network operator, the Government also confirmed preparations to provide new entrants with the right to roam onto at least one second generation network.

Following consideration of consultation responses the Government will offer three licences for 2x10 MHz paired spectrum plus 5 MHz unpaired spectrum, one licence for 2x15 MHz paired spectrum, and one licence of 2x15 MHz paired spectrum plus 5 MHz of unpaired spectrum which will be reserved for a new entrant.

A major advance in mobile communications came a step closer today as DTI Telecoms Minister Michael Wills confirmed that substantial progress had been made towards holding an auction of licences for the next generation of mobile telecommunications networks. In an announcement this afternoon, Mr Wills highlighted the Government’s intention to use the auction to promote further competition in the mobile telecommunications industry and to encourage new businesses to enter the mobile market. He confirmed that the Government:

i. is minded to ensure that new entrants’ customers can roam onto existing second generation networks until their own networks are established; and
ii. will consult further on the proposal that five licences be offered, a larger one being reserved for a new entrant.

Mr Wills said: "Good progress has been made in consultation with industry in developing detailed plans for an auction of licences for third generation (3G) mobile telecommunications. The Government has been considering further how to provide benefits to the full range of customers from increased and sustainable competition in view of the opportunities presented by the Information Age.

Key issues addressed in consultation have included: (i) means of helping potential new entrants to the mobile market in the UK compete on a fair basis; (ii) the opportunities provided by technical developments affecting the proposed number and design of licences.

In the light of these consultations the Government remains committed to its overall aim and objectives, which are those previously described by Barbara Roche, the then Telecoms Minister, in May 1998. In particular, the Government continues to attach great importance to the further development of competition in the sector, including promotion of sustainable market entry. To this end it is minded to ensure the availability for a period of roaming onto second generation networks by any new entrants to the mobile market. It is also initiating a further brief consultation on the specific proposal that five licences be offered, a larger one being reserved for a new entrant.

The Government expects that, subject to market and other developments and to final decisions nearer the time, the auction will take place in the second half of the financial year 1999-2000. In carrying out its further work, the Department will continue fully to consult industry and to publish all relevant information on the Radiocommunications Agency website at "www.open.gov.uk/radiocom/"."

In order to help clarify matters which have been the subject of recent speculation, the Department of Trade and Industry made the following announcement to the Stock Exchange at 7.30am this morning:

"In the July 1997 consultation document on third generation mobile telecommunications systems ("Multimedia Communications on the Move"), the Government indicated, subject to the views of respondents, that BT should be permitted to bid for and, if successful, be awarded radio spectrum for the provision of third generation mobile services provided that suitable competition safeguards could be put in place.

"BT is already subject to a range of regulatory measures including the Competition Act, measures to prevent undue discrimination in the provision of services, and regulatory oversight by the Director General of Telecommunications. The Department of Trade and Industry has also taken account of the EC Licensing Directive which requires that the licensing process and licence conditions are objectively justified, proportionate, transparent and non-discriminatory.

"If BT are to be able to hold wholly in its own name a third generation mobile licence, subject to competition safeguards, then it is reasonable that the company should be able to hold similarly a second generation mobile licence, subject to similar safeguards. This is the case because third generation mobile services will include comparable services to those already provided by second generation mobile telecommunications. As a corollary to this decision, tThe Secretary of State for Trade and Industry would be minded, therefore, to remove the shareholding restriction in Cellnet’s Telecommunications Act licence, which effectively precludes BT from raising its stake in the company above a 60 % ceiling, if BT placed its Cellnet shareholding into a separately accounted business, the purpose of which will be to ensure that BT does not unfairly subsidise or cross-subsidise or show undue preference to or exercise undue discrimination in favour of Cellnet."

The DTI has received positive responses from industry to its consultation on the framework for licensing operators to provide the UK’s Third Generation of mobile communications systems. A total of 35 responses were received from the following organisations:

AirTouch Communications, AT&T (UK) Ltd, BT Cable & Wireless Communications plc, Cable & Wireless plc, Cellnet (Telecom Securicor Cellular Radio Ltd), Cellcom Ltd, CCSR - (Centre for Communication Systems Research), CSS TAC - (Telecommunications Advisory Committee), Denbighshire County Council, Ericsson Ltd, FEI - (Federation of the Electronics Industry), FCS - (Federation of Communication Services Ltd), Fujitsu Europe, Telecom R&D Centre Ltd, General Cable plc, GSM MoU Association, ICO Global Communications Ionica plc, Inmarsat - (International Mobile Satellite Organisation), JRC - (Joint Radio Company Ltd), Lucent Technologies Network Systems UK Ltd, Motorola Cellular Infrastructure Group, NB3 - (National Band Three Ltd), Nokia Mobile Phones (UK) Ltd, NORWEB Communications, NTL, One 2 One Orange plc, PERA - (Political, Editorial & Regulatory Affairs), QNL (UK) Limited, Scientific Generics Ltd, Scottish Telecom, TMA - (Telecommunications Managers Association), UKISC - (UK Industrial Space Committee), Vodafone Ltd

The Radiocommunications Agency (RA) has published an advertisement in the Official Journal of the European Communities seeking expressions of interest in tendering to provide financial management consulting services. The financial management consultant would assist the RA in preparing for the possible auction of spectrum licences for UMTS, the third generation of mobile telecommunications.

In placing this advertisement, the RA is taking necessary preparatory steps to meet the Government's and industry's shared goal of early licensing certainty for UMTS. As well as this initiation of a competitive tender process other action being taken is formation of a dedicated team within RA to oversee the UMTS spectrum licensing process.

Click here for Multimedia Communications on the Move

The framework for licensing operators to provide the UK's Third Generation of mobile communications systems for the next millennium was launched in a consultation document today by Mrs Barbara Roche, Minister for Industry.