Irish 'beauty contest' for 3G gets under way

 

An Irish "beauty contest" for four third-generation or 3G licences was begun today that will cost mobile operators £310 million (€394 million).

Telecoms regulator Ms Etain Doyle said she had agreed an "innovative" fee structure to take account of market conditions and the expenditure involved in the roll-out and development of the services.

Previous 3G auctions in other European countries, particularly in Germany and Britain, stoked exorbitant licence costs, saddling bidders with heavy debts that still weigh down the telecoms sector.

Ireland, however, has decided to follow the French "beauty contest" model in which applicants tender for a licence but do not bid the price up.

The licences had been split into one "A" licence and three "B" licences, with differing terms and conditions. All licences involve an up-front payment, a moratorium of up to five years to enable bidders to devote spending to networks and then deferred annual payments.

All applicants can bid for either or both an "A" and "B" licence, but they will only be allowed take one of them. The 3G system allows for the transfer of data up to 40 times faster than existing mobile phones.

The Office of the Director of Telecommunications Regulation said it would offer broadband services and access to the Internet and enable mobile phones to rival PCs as the primary devices for Web access within a few years.