Australian 3G auction tops $821.8M on first day

Australian 3G auction tops $821.8M on first day

The six companies looking to win 3G (third-generation) spectrum in Australia put up $821.8 million on the first day of the government's spectrum auction, with the biggest sums reserved for the two national licences, according to the Australian Communications Authority (ACA), which conducted the auction.

The auction began Thursday, with one less bidder than previously expected after Telecom New Zealand abruptly pulled its AAPT Spectrum unit out of the process on the eve of its launch.

The spectrum is configured for auction into 58 lots for metropolitan and regional areas, with two of the lots offering licences for spectrum nationally. Other auction lots will be for licences that offer spectrum in the aggregated capital cities, while further lots will be for individual cities or regions.

The total reserve price for those lots is $1.08 billion. Bids were received for 32 of those lots on the first day.

Optus Mobile bid $203 million for the first national licence, and Telstra's 3G unit, Telstra 3G Spectrum Holdings, bid $194.8 million for the second national licence on offer.

Qualcomm-linked 3G Investments (Australia) bid $159 million for an aggregated capital cities licence, while Hutchison Telecommunications (Australia) bid a total of $196.1 million for a series of individual licences in Australia's biggest cities.

Competition limits set for the auction mean no bidder can acquire more than 25 per cent of the available spectrum in metropolitan areas, and no more than 50 per cent in regional Australia.

The auction was conducted over a number of rounds using the simultaneous ascending auction method, through electronic bidding. The results of each round will be made available to all bidders and to the public via the Internet, according to the ACA. It has set up a special Web site at where it is posting results.

The government has previously said it expects to raise about $2 billion from the auction, but vendors have warned they will not pay the huge prices earlier seen in European 3G auctions. Optus has already stated that it has calculated a price above which it will not be prepared to pay, and will walk away from the auction if that price is exceeded.

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