Further auction planned as 3G tops £22bn

The UK government has announced it will hold another online auction, this time for broadband fixed wireless access (BFWA) services.

Ecommerce Minister Patricia Hewitt said the auction will be held in September for three licences which will be awarded on a regional basis.

BFWA enables users to have cheaper and faster internet and multimedia access as it uses radio links rather than a telephone line.

The announcement comes as bids in the current radio spectrum auction topped £22bn. Analysts warned last week that the extravagant bids in the 3G licence auction could delay the sale of fixed broadband wireless licences, and questioned whether the government would use the auction process again.

But Hewitt said that the awarding of licences by auction ensures that they are taken up by those operators best placed to develop services more efficiently.

"There is an increasing demand for broadband services in all sectors of the economy including small businesses. I want these services to be developed as quickly as possible. The licence package is designed to encourage new entrants and the development of a competitive market," she said.

The auction in September is for spectrum available at 28Ghz for BFWA. Three licences will be awarded in coverage areas to be defined over the next month. Proposals for awarding 40Ghz licences will be announced in the summer, with licences made available in the autumn.

The government invited views from interested parties on the proposals, including the number and size of regional coverage areas, by 19 May.

Bidding in the 3G mobile auction after round 145 sees Canadian group TIW leading Licence A with a £4.39bn bid; Vodafone leading B with £5.96bn; NTL Mobile leading C with £3.97bn; BT3G leading D with £3.944bn; and Orange leading E with £3.95bn.

The auction has now been suspended until Tuesday 25 April. The Secretary of State, after consulting bidders, called a recess day for Thursday 20 April.