Spectrum's golden glow

By PAULA OLIVER

The radio spectrum auction is fattening the potential size of the Government's wallet by the day. Total bids increased $15 million over the past week, taking the total offered over $85 million.

While many telecommunications experts are still laughing at what they perceive to be bargain prices for the second and third-generation spectrum, the Government is certain to be happy watching its coffers grow.

It took a a rule change and the entry of new bidders Walker Wireless and publisher INL into the 3G race to lift the auction's lethargic pace.

The biggest spender holding spectrum at the close of bidding yesterday was Vodafone, with $21.8 million riding on a combination of 2G and 3G frequencies.

A late move by INL saw it offer the highest amount yet for a pair of 3G lots, at $17.4 million, cancelling out an earlier bid by Telstra Saturn.

Ihug is the biggest spender in the 2G race, with total bids of $4.1 million on the table, closely followed by TVNZ subsidiary Broadcasting Communications and Vodafone.

The Ministry of Economic Development's September rule changes have clearly contributed to an upswing in the auction's pace, but many bidders still predict it has a long way to go.

Although there will be winners and losers among the telcos when the auction does eventually end, the public could also feel the effects of a Government windfall.

The auction proceeds have not been written into the Government's Budget, and a spokeswoman from the office of the Minister of Communications, Paul Swain, said yesterday that no decision had been made on how the Government would spend the money.

The Australian Government wrote $A2 billion into its budget this year in an estimation of what it would receive from an upcoming spectrum auction.