Wireless licence sale fails to attract many bids

The downturn in telecoms market sentiment was further underlined yesterday when the auction for broadband fixed-wireless licences in 14 regions across Britain failed to generate a sufficient number of bids to cover the 42 licences on offer.

The downturn in telecoms market sentiment was further underlined yesterday when the auction for broadband fixed-wireless licences in 14 regions across Britain failed to generate a sufficient number of bids to cover the 42 licences on offer.

Indeed, the number of bidders fell to nine when Unica Communications abruptly pulled out and another unidentified contestant called for a recess, stopping the auction until Monday. That could leave just eight bidders, since calling a recess in mobile licence auctions has usually foreshadowed a company's withdrawal.

At the end of the first round yesterday bids totalled £27.1m. The Government has reserve bids totalling £78m for the three licences in each of the 14 areas comprised of 11 English regions as well as Northern Ireland, Scotland and Wales. Analysts have said the auction could raise a £1bn or more.

Fixed wireless technology uses radio waves to transmit data on a symmetric two-way network. It offers always-on internet access at two megabits per second, or 40 times faster than standard dial-up speeds.

The three London area licences attracted bids totalling £12m. The Manchester area licences attracted two bids worth £6m as did the West Midlands area licences. No company bid was made for the third licence in either area.

Eight regions, offering 24 licences covering much of England and Wales, received no bids. In Northern Ireland, Eircom was the only bidder with an offer of £100,000 for one of the three licences.

The fall off in demand for telecoms licences also hit Switzerland where the number of bidders for next week's auction of four third-generation mobile permits fell to five after three groups pulled out. Abandoning the auction were T-Mobile, the wireless arm of Deutsche Telekom, Norway's Telenor and Hutchison Whampoa's European mobile division. Remaining bidders include Swisscom and Orange Communications. The Swiss government has put a minimum price of 50m Swiss francs (£2m) on each licence.