German 3G licence auction: how the bidding works

As the 12 round auction for UMTS licences gets under way, ZDNet Germany reports on the battle over the future of third generation

The first bids were announced at 9am GMT yesterday. Each party is allowed to come back ten times a day to increase its bid for up to three weeks. In an early hiccup, a spokesman for the German UMTS bid process stated that the post and telecommunications regulations Web site was made unavailable due to too many people trying to access it.

In the Bild am Sonntag, the president of the Regulations Authorities, Klaus Dieter Scheurle, explained that only four of the seven companies can get hold of licences. With fewer competitors, the ensuing rivalry is likely to benefit the user.

MobilCom and T-Mobil led the UMTS auction after the first round. While MobilCom company bid just over 1bn deutschmarks for two rounds, the T-Mobil showed it was ready to pay 300m deutschmarks for three rounds. In the rounds that followed, Mannesmann Mobilfunk and Viag Interkom also stepped in, bringing the total bid up to 2bn deutschmarks.

Later on the first day, E-Plus-Hutchinson, debitel, Deutsche Telekom Mobilnet, Group 3G, Mannesmann Mobilfunk, Mobilcom and Viag Interkom all entered the auction for the much sought after 3G mobile communication licences. Money from the auction will enter federal coffers, with proceeds likely to be tens of billions of deutschmarks.

Earlier today MobilCom, a German telco owned by France Telecom, was briefly shut out of the auction, because MobilCom chief Gerhard Schmid made an indirect offer to debitel, which is very keen for one of the licenses.

For German speaking readers, full coverage of the German 3G licence auction can be found on ZDNet Germany.

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