Frequency auction
April 12, 2010
The first day of bidding has ended in Europe's first ever auction for "fourth generation" frequencies, with opening bids for some frequencies well above the required minimum.
The auction, held in the western German city of Mainz, is for "Long Term Evolution," a technology that will allow users to view high-definition videos on mobile phones, and to transfer data at much higher speeds.
In the first three rounds of bidding, a total of nearly 117 million euros ($159 million) was offered, the Federal Network Agency announced.
Highly coveted among the four bidders were the frequencies of the so-called "digital dividend," a wavelength is particularly suited for providing remote parts of the country with fast Internet access.
Mobile phone operators were eager to snatch up the additional spectrums, which will enable them to handle more data traffic and launch new services.
Hot commodity
By the end of the second round of bidding, every frequency block on offer had at least one bidder, leaving observers optimistic about the sale.
"Demand is well ahead of supply," said Matthias Kurth, the head of the German telecoms regulator running the auction.
However, the auction isn't open to all mobile operators. Germany's federal network regular admitted only Vodafone, T-Mobile, E-Plus, and O2 to the bidding.
The auction, which is expected to last several weeks, is unlikely to be as lucrative as the one for third generation UMTS licenses a decade ago, which raised 50 billion euros ($67 billion) for the German government.
Coverage for remote areas
Berlin hopes to see the additional spectrum used to cover rural and remote areas, thus eliminating "white spots" lacking broadband coverage. The 800 MHz frequencies are particularly well suited to coverage in rural areas, because they transport mobile broadband over long distances.
The new frequencies could be competition for broadband and cable operators, since computers will also be able to use 4G networks to access the Internet.
smh/AFP/Reuters/dpa
Editor: Chuck Penfold