Transco plans £260m mobile network as licence bids top £19bn

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The Independent Online

The government auction of next-generation mobile phone licences yesterday claimed another victim as MCI WorldCom, the US long-distance carrier, withdrew as the total value of bids passed the £19bn mark.

The move came as Transco, the pipeline arm of BG, unveiled a joint venture to develop a new network to support the roll-out of the so-called third generation mobile services, which will include video and high-speed internet access.

WorldCom's withdrawal leaves seven bidders battling overfive licences.The tug of war over licence B, which offers the broadest bandwidth available to an existing operator, resumed as BT returned to the fray with a mammoth £5bn bid, overtaking Vodafone's £4.88bn offer in the previous round.

Sir Peter Bonfield, BT's chief executive, said: "An auction is not over until its over. Anyone who tries to predict the outcome can be guaranteed of only one thing - they'll be wrong."

Meanwhile the price of licence A, which is as broad as B but reserved for a new entrant, crossed the £4bn level as NTL Mobile outbid Canada's Telesystem International Wireless. TIW switched its strategy to focus on licence E and went head to head with Orange, which raised additional funds to finance its bet. TIW ended the day ahead, offering £3.47bn while Telefónica topped the bidding for licence C with a £3.41bn offer and One2One led the race for licence D with a similar bid.

Transco is pairing up with SpectraSite International of the US to offer a network of radio towers for third-generation mobile operators. The joint venture will have an initial value of £260m and will include Transco's 700 communications towers and a further 1,500 new towers that it plans to erect on BG sites.

Third-generation licencees are likely to require access to about 10,000 communications towers compared with 3,000 for existing mobile networks.

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