Calls for EC intervention on mobile auctions

Billions spent on mobile auctions is a 'no no' say European experts who question whether any money will be left for investment. Jane Wakefield reports from Brussels

The spectre of more over-priced European mobile auctions met with fierce resistance Thursday at a public hearing on the future of telecoms rules in Brussels, with calls for EC intervention.

Spurred on by the recent UK auction of 3G mobile licences which raised £22.5bn for the government, experts, including the Commissioner for the Information Society Erkki Liikanenen, have questioned whether companies will have money to invest in networks after paying for licences.

At a public hearing in advance of sweeping changes recommended for European telecom rules, mobile companies confirmed their dismay at the prospect of more billion pound lotteries. Nokia likened the auction system to "selling the crown jewels" and questioned how existing methods are thought democratic. "There is enormous taxation in the field of licence auctioning but no-one has asked the citizens of the UK if they want to spend E34bn," he says.

One 2 One, which has paid over £4bn for a licence, called on government to provide guarantees that its huge investment would be a safe one. "We have spent over twice the amount we have spent already on GMS," says a spokeswoman. "We are looking for certainty in investing such a significant amount in the infrastructure."

One operator, Orange, says it expects, at the very least, for the Commission to guarantee the money paid in such auctions is ploughed back into spectrum management. "We are disappointed that the Commission has nothing to say about the fees being re-invested in the efficiency of the spectrum. We want to see that changed," a spokeswoman said.

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