Bidders fork out "paltry" sums for Swiss UMTS licences

Switzerland's UMTS licences raised just SFr205 million at auction this week Keystone

The auction of Switzerland's third generation mobile phone licences has yielded just SFr205 million ($120 million) for the four licences on offer. The bidders snapped up the licences for little more than the minimum opening bid price.

This content was published on December 6, 2000 minutes

It took just three hours for the four operators - Swisscom, Orange, Telefonica of Spain and dSpeed (Sunrise/diAx) - to place their bids and walk away with their Universal Mobile Telecommunications System (UMTS) licences.

Only Orange paid more than the minimum bid price of SFr50 million, forking out SFr55 million for a licence whose equivalent in Germany and Italy fetched billions at similar auctions.

"We are very happy with the result," said Swisscom spokesman, Christian Neuhaus, adding that in his view the price was "correct".

Orange said it had paid a "reasonable price", while a Sunrise/diAx spokesman said the company had been "lucky" to secure a licence for just SFr50 million.

The government had originally expected the sale to attract revenues similar to those in other European UMTS auctions. "Obviously, we were hoping that the auction would raise more money than it did," said finance ministry spokesman, Daniel Eckmann.

But the Swiss sale ran into problems after several bidders withdrew in the weeks leading up to the auction.

It was finally cancelled at the last minute after two of the remaining five bidders - Sunrise and diAx - announced a merger on the eve of the auction.

When it became clear that only four operators would be bidding for the four licences on offer, the government tried, but failed, to have the minimum bid price increased to SFr250 million per licence. That would have brought revenues in line with the Austrian auction, which raised SFr1.07 billion.

UMTS will in future enable providers to offer a whole new range of fast mobile Internet, data and multimedia services that are way beyond the capabilities of current Global System for Mobile (GSM) networks.

It remains to be seen whether the paltry sums paid out by Switzerland's new UMTS providers will translate into lower prices for customers.

The auction results can be viewed at the Internet address below.

by Jonas Hughes

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