3G spectrum sale hive of inactivity

By PAULA OLIVER

A call for an early end to the Government's disappointing auction of third-generation (3G) radio spectrum is being rejected by most bidders.

Telstra Saturn chief executive Jack Matthews said on Tuesday that he would like to see an end to bidding for 3G spectrum, because there had been no new bids since round one.

The auction of second-generation (2G) and 3G continued yesterday, but bids dribbled along to total just $35.8 million - a fraction of the amount the Government had hoped for.

Action in the 2G side of the auction is more competitive, with several players outbidding one another each day.

Ihug, Telstra Saturn, TVNZ-owned Broadcast Communications, and Walker Wireless have all made repeated bids for 2G, while the arrival of Pacific Retail Group director Nick Gordon created a stir this week.

But the big money expected for 3G spectrum is still being held back, and unless a challenger arrives to take on the big three of Vodafone, Telstra Saturn and Telecom, the auction will end with a whimper.

Registered bidder Jump Capital had been expected to bid for 3G spectrum, but has not yet made a move.

Spokesman Leigh Davis said last night that his group was prepared to be very patient, and did not expect the 3G lots to close separately.

"There are rules for the auction, and the 3G spectrum is not separate to 2G, so the whole thing must end at once," he said. "The auction is very unpredictable, and there is no necessity to rush."

The manager of radio spectrum policy for the Ministry of Economic Development, Kevin Kelly, said an early closure of the 3G lots would require a rule change, which he had no plans to look at yet.

He said the rules allowed the Government to withdraw lots from sale if it wanted to, or to not accept bids. But the auction could end only with two clear rounds of bidding for both 2G and 3G spectrum.