Radio spectrum auction sparks up

A bidding war that began in second-generation (2G) spectrum lots yesterday spilled over into third-generation, at last adding fire and conflict to the Government's radio spectrum auction.

Walker Wireless' $11 million play for 3G spectrum was targeted at the lots held by Telstra Saturn, clearly signalling that their battle during the week for 2G spectrum had escalated.

Until now, the supposedly lucrative 3G spectrum had failed to attract interest, with bids far below pre-auction expectations because a challenger to Telecom, Telstra Saturn and Vodafone had not emerged.

Sources suggest that bidders had been concerned that major telcos could use their considerable wealth to hoard 2G spectrum, rather than allow smaller players into the mix.

While a cap has been placed on how much 3G spectrum one company can own, in the interests of competition, there is no similar cap for 2G. The lack of protection led ihug to take a case to court before the auction, looking for a change to the rules, but the case was thrown out.

Walker Wireless general manager Paul Ryan said his bids had been made because of stagnant 3G prices.

"It's taken us a while to develop a strategy, but the price for 3G stacks up, and as long as it does we will be interested," he said.

Walker Wireless has the investment backing of the Todd family, Craig Heatley and Stephen Tindall, meaning the battle could go on for some time.