Poor start for mobile bids

By PAULA OLIVER

Bidders have taken only tentative steps in the opening rounds of the Government's spectrum auction.

The internet battle between telco giants for the lucrative third generation (3G) frequencies on offer failed to ignite with bids reaching just $3.5 million.

The 3G frequencies enable some mobile phones to access the internet, or display moving pictures.

Mobile giant Vodafone bid $3.5 million for a part of the 3G spectrum, while Telstra Saturn's bids were almost identical by the close of the day.

Telecom did not make a bid and bidding for 2G frequencies was also slow.

The auction created controversy right up until its opening, with ihug and the New Zealand Maori Council going to court in an attempt to block it taking place.

The Government has set aside part of the 3G spectrum at a discounted rate for Maori, but they are pursuing a case that claims to have rights to the full spectrum.

Spectrum programme manager Dave Kershaw said it was too early yet to comment on how the auction was shaping up.

A similar auction in Britain netted $72 billion, but many are predicting New Zealand's auction will be lucky to reach $100 million, because demand for 3G spectrum is not as high.

The auction will continue today, with a further two rounds of bidding. Bidding could continue for another three or four months, with further rounds to be scheduled at a later date.

Other registered bidders include newspaper publisher INL, Airways Corporation, Mighty River Power, and Transpower.