OneTel withdraws from UK mobile licence auction

Australian-based telecommunications company OneTel has withdrawn from bidding for Britain's new mobile phone licences as the stakes were raised to £3m

OneTel, backed by media tycoon Rupert Murdoch, says that its business plans do not support a licence price in excess of £2.5m. A spokeswoman says that "licence bidding has exceeded everyone's expectations and OneTel was not prepared to buy a licence at any cost."

The government is currently auctioning five licences for operators to deliver third generation (3G) mobile services. The bidding began on March 6 with 13 companies vying for the licences. Onetel is the fifth company to withdraw -- following in the footsteps of 3GUK, Crescent, Epsilon, One.Tel and Spectrumco -- leaving just eight companies in the bidding. Bidding will continue until just five companies remain. Over £13bn has been bid so far.

The new networks will enable greatly increased bandwidth for mobile surfing. This should, in turn, enhance the capabilities of WAP giving companies the chance to offer more attractive services to mobile Internet users.

The remaining bidders are: BTCellnet (quote: BT.A), NTL, One2One, Orange (quote: ORA), Telefonica, TIW, Vodafone AirTouch (quote: VOD) and Worldcom. Worldcom leads the bids for the highest frequency network licence.

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