Hopes fading for windfall from spectrum auction

By PAULA OLIVER

The Government's hopes for a windfall from its radio spectrum auction could be dashed unless another player enters the fray this morning.

No new bids were received yesterday and under the auction's rules the three lots of third generation (3G) spectrum will be sold unless a new bidder makes a move in this morning's 9 am round.

Vodafone, Telstra-Saturn and Telecom are each sitting on one of the three available 3G spectrum bands, with almost identical prices just above the Government's reserve price.

The Government had hoped to claim hundreds of millions of dollars from the auction after the British Government received more than £20 billion from the sale of 3G frequencies there.

Here, the three major players have all bid $3.5 million for 10Mhz of spectrum, and an identical sum for its matching pair.

A further $1.8 million has been bid by each company for 5Mhz of spectrum alongside the 10Mhz chunk.

Competition is more fierce in the less valuable second generation (2G) frequencies, where Ihug and TVNZ's Broadcast Communications top most of the lots with an average top bid of $12,000.