Global giants line up bids for new mobile licences in UK

THE GOVERNMENT fired the starting gun yesterday in the race to win licences to operate the next generation of mobile phone networks that are expected to come on stream in 2003.

The so-called third-generation, universal mobile telephone service licences (UMTS), will vastly increase the spectrum capacity of mobile phone networks. This will permit the introduction of new services such as mobile videophones andallow for e-commerce transactions and other interactive services over mobile handsets.

The Department of Trade and Industry is to auction five licences of varying bandwidth capacity. One licence will be reserved for a new entrant in an attempt to boost competition in the mobile sector that is currently split among the four established network operators - One2One, Orange, BT Cellnet and Vodafone.

The DTI has put reserve bids on the five licences that total pounds 500m, although Goldman Sachs expects the auction to raise three times that amount. For the four existing operators the stakes to secure a UMTS licence will be high indeed: without one a network operator will be less able to offer the interactive services that are expected eventually to provide greater revenue than voice telephony services.

The deadline for companies to register for the auction is 12 January. The bidding rounds will take place in March. Britain's UMTS auction trails that of Finland, Europe's first, but will precede Germany's auction, which is planned for May.

The fate of the UK and German auctions would seem to be closely tied now that One2One is owned by Deutsche Telekom and Orange is being acquired by Mannesmann. BT is present in Germany with a 45 per cent interest in Viag Intercom, while Vodafone has a minority interest in Mannesmann's mobile business.

"Clearly there is some merit in companies extending their footprints across Europe," said Jeremy Clayton, who heads the DTI's auction team. "But there is also interest from new entrants, including media companies and telecoms companies from around world."

Among the leading contenders for the fifth licence are WorldCom, Japan's NTT DoCoMo, and cable company NTL. Other companies that might join a consortium to bid for a licence could include Microsoft and Intel. Indeed, WorldCom, which until now has specialised in building its fibre optic network to connect business users, is understood to be planning a bid.

"They have a big team focusing on UMTS services," said an industry source familiar with WorldCom. "They're looking at all the legal and market conditions, in short, just the things you need to establish a business plan."

Industry watchers said that the four established operators should be able to bid more than newcomers, but noted that the process could throw up surprises.

"In the past we had competition from established companies and a few new, but big international players like Airtouch or Mannesmann," said Jurgen Heilbock, a telecoms industry lawyer with Jones Day. "What's new is that start-ups are backed by big investment funds that can afford to pay hundreds of millions or billions of pounds."

Outlook, page 19

PROMOTED VIDEO
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Arts and Entertainment
Tycoons' text: Warren Buffett and Bill Gates both cite John Brookes' 'Business Adventures' as their favourite book
booksFind out why America's richest men are reading John Brookes
Arts and Entertainment
<p><strong>2008</strong></p>
<p>Troubled actor Robert Downey Jr cements his comeback from drug problems by bagging the lead role in Iron Man. Two further films follow</p>
filmRobert Downey Jr named Hollywood's highest paid actor for second year running
Life and Style
Dale Bolinger arranged to meet the girl via a fetish website
life
Property
Sign here, please: Magna Carta Island
propertyYours for a cool £4m
Life and Style
tech
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
The Commonwealth flag flies outside Westminster Abbey in central London
news
Arts and Entertainment
Struggling actors who scrape a living working in repertory theatres should get paid a 'living wage', Sir Ian McKellen has claimed
theatre
Extras
indybest
News
Skye McCole Bartusiak's mother said she didn't use drink or drugs
peopleActress was known for role in Mel Gibson film The Patriot
Arts and Entertainment
tvWebsite will allow you to watch all 522 shows on-demand
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Project Manager - ETRM/CTRM

£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...

Day In a Page

Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor