Ihug bids to enliven auction

By PAULA OLIVER

Ihug tried to kick-start the Government's second-generation (2G) radio spectrum auction yesterday, saying it was time those without much money were weeded out.

Ihug made sweeping bids for management rights across the 2G frequency range, lifting some lots from a disappointing $500 to $100,000.

But the attempt to move along the extremely slow auction had no effect on the lucrative third-generation (3G) frequencies, which still sit barely above reserve price.

The Government had hoped to claim hundreds of millions of dollars from the auction but, after the latest round, bids total just $35.2 million. Most of that is tied up in the 3G area, which sits at about $33.4 million.

Competition for the 3G frequencies had been expected to heat up yesterday, after Jump Capital, backed by the Todd family and Fay, Richwhite Holdings, confirmed it would enter the auction.

But they did not make a bid, and the big three of Telecom, Vodafone and Telstra Saturn remain unchallenged for 3G.

Other players are understood to be becoming interested in bidding for 3G spectrum, attracted by its unexpected bargain price.

Vodafone has bid a total of $10.5 million for 3G spectrum, $1.7 million for its neighbouring TDD frequency, and has also shown interest in 2G frequencies.

Telecom and Telstra Saturn have each bid about $10.5 million for 3G.

Ihug director Nick Wood said yesterday's larger bids for 2G barely made the auction more exciting, but he thought it was time a bit more momentum was injected.

"It's no good mucking around all year. We've all got better things to do than sit in front of our computers watching what's going on," he said. "We thought we'd try to clear the decks, and get it moving along."

Ihug are now at the top of several lots, but Mr Wood said: "We don't need it all. We just aren't ready to show our hand yet."

He would not comment on Ihug's intentions for the 3G market, but did say that it needed a further player to lift prices.

Ihug also announced yesterday that it would appeal against a High Court ruling rejecting its case to halt the auction.