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Bidders pull out of UMTS licence auction

The much vaunted new generation phone licences are failing to inspire bidders Keystone

There are fears that the auction for the third generation of mobile licences in Switzerland could turn into a farce, with only five of the original 10 bidders still in the race. The auction is set to begin on Monday.

This content was published on November 10, 2000 - 15:56

The Federal Office of Communications said on Friday that if one more bidder withdraws, an auction would be meaningless.

"There is no reason to hold an auction if there are only four remaining interested candidates," said the Office's director Marc Furrer.

This would mean that the bidders would be able to obtain the much-coveted prize of a Universal Mobile Telecommunications System (UMTS) licence for the minimum bidding price of SFr50 million ($28.57 million).

Three bidders - Hutchison, Telenor and T-Mobile - withdrew from the auction on Friday, with Switzerland's largest cable television provider, Cablecom, having withdrawn late on Thursday.

If there were only four bidders, the government would be able to count on only the minimum SFr200 million flowing into the federal coffers, much less than the SFr6-7 billion forecast by some telecommunications analysts.

However, Furrer says that SFr50 million is already a high price to have to pay for a licence and the lucky winners could then invest more on the necessary infrastructure.

He said his Office did not want maximum receipts but a rational distribution of the licences and a maximum of fair play.

"It's all to the benefit of the customers," he told a news conference in Biel, where he outlined how the auction will proceed.

Between now and the auction, the situation could change again, with rumours of alliances being made. Germany's Deutsche Telekom and diAx are companies being mentioned.

For the time being, the five remaining bidders are diAx, Orange, Sunrise, Swisscom and Telefonica.

swissinfo with agencies

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