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Swiss get measly 3G price
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December 6, 2000: 9:37 a.m. ET
3G mobile phone license auction raises paltry $120 million for Swiss govt
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LONDON (CNNfn) - Switzerland's auction of third-generation mobile-phone permits ended with cellular operators walking away with licenses at bargain-basement prices, as expected, because not enough buyers stepped forward to push the bidding higher.
The Swiss government raised a measly 205 million Swiss francs ($120.1 million) far less than the billions expected several weeks ago, as the auction ended after three rounds of bids.
The four bidders -- the country's dominant phone company Swisscom AG, Tele Danmark A/S subsidiary dSpeed, France Telecom's unit Orange and Spain's Telefónica SA – each won a license. Only Orange paid more than the minimum price of 50 million francs, putting 55 million francs on the table in round one.
The Swiss telecom office even placed the first bids for two of the licenses to get the ball rolling. The licenses allow mobile-phone companies to establish services offering video, voice and Internet access to mobile phone users, but a wave of enthusiasm among network operators has ebbed after hotly contested license auctions earlier this year generated multi-billion-euro sums for the governments of Germany and Britain.
Telecommunication companies' share prices and bond ratings have fallen amid doubts that high-tech services will generate enough profit to justify the mammoth investments made.
In August, 10 bidders registered their intention to enter bids for Swiss 3G licenses, but the number quickly dwindled. By the weekend before the scheduled start of the auction on Nov. 13, the line-up had fallen to four as several firms pulled out because of mergers or partnerships with former rivals.
Telecom tie-ups
Swisscom agreed to sell a 25 percent stake in its Swiss mobile telecom activities to Vodafone Group PLC (VOD), the world's biggest mobile phone operator. France Telecom SA (PFTE) obtained majority control of Orange Communications SA and Tele Danmark secured control of the company formed when Sunrise and diAx merged.
Swiss telecommunication regulator ComCom said last week the auction would resume under the original conditions, with the minimum price still 50 million Swiss francs per license.
Poland's telecom ministry, facing potential lawsuits after its disappointing 3G tender, said on Wednesday it had cancelled the procedure and would instead award 3G licenses to each of the three local incumbents.
Only three bidders -- backed by Vodafone, Deutsche Telekom AG (FDTE), France Telecom and Vivendi SA (FPEX) -- were bidding for the five permits on offer.
The bidders are expected to pay  650 million each for their 3G licenses, the ministry said.
Poland's annulment follows a flop in Italy's 3G license auction in October, when the number of contenders fell to equal the number of permits offered after just two days of bidding. Instead of the 21 billion Italy had hoped to raise, it managed to get 12.16 billion for five licenses.
--from staff and wire reports 
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