Bids for next generation mobile phone licences jumped £740m yesterday - a record one day advance - taking the total offered for the five licences to £6.3bn.
What has become a financial windfall for the Treasury, has also turned into a game of brinkmanship for Britain's four existing network operators and the nine outside challengers.
But industry experts believe the bids on offer could still double. "When you get to the £10bn-£12bn range you're talking heady levels, but it would not surprise me to see it there," said John Hughes, president of Lucent Technologies' mobile infrastructure division. "There's a lot of players with deep pockets (and) nobody wants to blink first."
Yesterday Vodafone and WorldCom, by market value the two biggest companies in the auction, set the pace. WorldCom supplanted One.tel, backed by Rupert Murdoch's News Corp, with a bid of £1.38bn for licence A, which is reserved for a new entrant.
Vodafone made the biggest bid, with a £1.48bn offer for Licence B, supplanting a £1.38bn bid from SpectrumCo, the consortium in which Virgin, Tesco and Finland's Sonera are shareholders. Telefonica held the pole position for licence C with a £1.16bn bid, while Crescent Wireless bid £1.11bn for licence D. One2One, meanwhile, outbid Orange with a £1.21bn bid in yesterday's final auction round.
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