Swiss mobile phone licence auction postponed

UMTS auction: Nov 2000

The long-awaited auction in Switzerland of licences for the new generation of mobile telephones was postponed on Monday shortly before the sale was due to begin. The companies involved have criticised the authorities for the decision.

This content was published on November 13, 2000 minutes

A spokesman for the federal communications office, which organised the auction of the Universal Mobile Telecommunications System (UMTS) licences, made the announcement of a postponement at a news conference in Bern.

The head of the office, Marc Furrer, said the merger decision late on Sunday by two of the remaining five bidders, Sunrise and diAx, had led to the postponement.

Their merger left only four companies - out of an original 10 - bidding for four licences. The remaining contenders are Swisscom, Orange, diAx-Sunrise, and the Spanish concern Telefonica.

The communications minister, Moritz Leuenberger, said that under the circumstances it was right to delay the sale. "The fact is that the situation has altered now that there are only four, instead of eight or 10 companies bidding."

A decision on when the auction will be held, and under what conditions, is to be made in December, according to a communiqué by the federal communications office. It said "it was also investigating if there are any indications that unlawful agreements were made".

Furrer said the possibility of an annual licence fee was one of the options being considered.

The federal authorities had hoped the auction would be highly lucrative, raising up to SFr10 billion ($5.68 billion). However, under the current regulations, the four bidders will only be expected to pay the starting fee of SFr50 million each.

The postponement decision has been criticised by the bidding companies. A Swisscom spokesman said the auction rules should not now be changed, and warned of legal action. A spokeswoman for Orange said the company was "a little irritated" by the move.

However, the decision has welcomed by one of the parties in the Swiss government, the Social Democrats, and trade unions. The Social Democrats maintained SFr50 million was far too little to pay for a licence.

The licences will enable providers to offer a new range of fast mobile Internet, data and multimedia services which go way beyond the existing capabilities of current Global System for Mobile (GSM) networks.

Auctions in other European countries have produced mixed outcomes in the past few months. Billions have passed into some European government coffers, and the Swiss authorities were hoping for a big windfall to help offset the federal debt.

UMTS licences in Germany went for SFr79 billion ($45 billion) and the British government attracted SFr56 billion. However, there have also been disappointments and failures.

The auction in Italy was labelled "an Italian farce" and a "Roman tragedy", after the bidders managed to secure the licences for a total of only SFr18 billion.

Licences in the Netherlands attracted SFr4 billion and only SFr1.07 billion in Austria.

swissinfo with agencies

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