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UMTS auction to go ahead on Wednesday

Four bidders, including Swisscom, Orange, Sunrise/diAx and Telefonica are lining up for four UMTS licenses Keystone

Switzerland's auction of third-generation mobile phone licences is to begin next Wednesday, after being called off at the last minute two weeks ago.

This content was published on December 1, 2000 - 10:29

With just four companies bidding for the four licences, the auction is unlikely to yield anything close to the billions of francs in revenue that the federal government was hoping for.

The Federal Communications Commission announced on Thursday that the opening bids would remain at a set minimum of SFr50 million ($29 million) per licence.

The communications minister, Moritz Leuenberger, had hoped the minimum would be increased to SFr250 million, but the Commission decided that the rules laid down for the original auction should remain in place.

The Swiss finance minister, Kaspar Villiger, has already announced some cost-saving measures to compensate for lower UMTS revenue. The government had expected to be able to use some of the money to reduce the national debt.

The auction was supposed to take place on November 13. However, was called off at the last minute by the Federal Communications Office, after the number of bidders fell to four following a merger between operators, Sunrise and diAx.

The merger led to suspicions that the four remaining bidders may have colluded to keep down the price of the licences, but the Swiss telecommunications regulator, ComCom, concluded that there was no evidence of an illegal agreement among the potential bidders.

ComCom also decided the Sunrise and diAx merger would not harm the competitiveness of the future UMTS market. "Our decision was made in the interests of the consumers," said ComCom president, Fulvio Caccia.

Sunrise and diAx will now bid for a licence, along with Swisscom, Orange and Telefonica.

Caccia believes the first two licenses to be sold on Wednesday will only achieve the minimum price of SFr50 million. But he says the others should fetch between SFr60 and 70 million.

Swisscom and Orange said they were satisfied with Wednesday's announcement. A spokesman for Swisscom said that going ahead with the auction with unaltered rules was "only logical".

Orange said it had anticipated the Communication Commission's decision, while Telefonica had already urged the Swiss authorities last week to "play by the original rules".

The Swiss postponement came hard on the heels of UMTS auction flops in Austria and Italy and was a far cry from the bonanza days when billions were taken at the German and British auctions.

The auction will be carried out electronically and can be followed over the Internet on www.umtsauction.ch.

swissinfo with agencies

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