Spectrum sale moves to four rounds a day

By PAULA OLIVER

Bidders are fastening their seatbelts this morning in anticipation of a rapid-fire ending to the Government's flagging radio spectrum auction.

The auction of second-generation (2G) and third-generation (3G) spectrum has so far failed to live up to starry predictions, but a Ministry of Economic Development rule change, effective today, could bring a change of pace.

As a result of bidder feedback the online auction will now have four rounds a day, instead of two. The round times have been reduced from one hour each to half an hour.

An increase in minimum bidding amounts is also likely to lift the pace, as the more affluent players are isolated from those who are unable to keep up. The minimum bid for all spectrum has been 5 per cent of its previous value up until now, but 2G management rights bidding will increase to 10 per cent. Many of the 2G lots are now sitting at $500,000, meaning the rise should have significant impact.

But the most disappointing side of the auction, 3G, has not been changed.

Many of the smaller 2G licences are now sitting at $500, and often tiny increases to their totals are all that keeps the auction moving. But the ministry has now made the minimum bid for those licences $500, effectively doubling their present value.

Total bids at the auction have reached $43 million, with Telecom, Telstra Saturn and Vodafone still unchallenged for 3G spectrum.