DTI delays auction for mobile phone licences

DTI delays auction for mobile phone licences
Melanie Reynolds The government has delayed the auction of UMTS third generation mobile phone licences. This is due to plans for increasing the number of operator licences to be auctioned to five. The auction will now take place any time between October and March next year instead of this summer. The government is hoping to encourage further entrants into the market with the offer of a fifth licence. It also intends to allow customers of any new operator to use existing national GSM networks while the new operator’s network is being set up. News of the fresh deliberations was welcomed by GSM network operators like Orange and Tetra firm Dolphin Telecom. Dolphin’s CEO Ted Beddoes pointed out that with four licences it was likely they would be secured by the existing operators. “With five licences there will be at least one new entrant in the UMTS market,” said Beddoes. “This will both encourage potential new entrants to participate in the auction and stimulate competition.” But analysts remain unconvinced of the viability of a fifth licence. “I think there’s certainly enough spectrum for four,” said Nicky Scott, a consultant at telecoms analyst Ovum. “I’m not sure there’s spectrum for five.” The delay means that the UK is unlikely to be the first to have an operational UMTS network. That honour is expected to go to Finland but this is not considered harmful to the UK. “I don’t think we’re going to lose out,” said Scott. “The UK will not be able to showcase it, but we will still be up there.” Operators in Finland, however, will not have to pay for the licences which Scott described as an advantage: “They will have more to invest in rolling out the network.” A government source dismissed claims that the delay was caused by Peter Mandelson’s departure as Trade and Industry Secretary late last year. The source said the delay is due to the need to get any changes correct rather than rushing into a quick decision.


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