UK names 3G licence hopefuls

The UK Government today named the 13 companies that will battle it out for the five third generation (3G) mobile operator licences being auctioned next month.

Of the 13, nine are new entrants, including Virgin, MCI Worldcom and Japanese bank Nomura. Bidding starts in March and will span a number of rounds lasting several weeks. Reserve prices for the five licences total £500 million.

Five 3G spectrum licences are up for grabs, with the four existing mobile players in a strong position to secure one each. The Radiocommunications Agency has reserved the biggest allocation of spectrum for a new entrant into the UK telecoms market.

3G technology will enable high speed wireless data transfer, enabling mobile users to download multimedia, access corporate data or even videoconference while on the move. While capable of 2Mbps, analysts say data speed is likely to be much lower when the services are initially launched.

Patricia Hewitt, small businesses and ecommerce minister, said: "The prospect of one or more new mobile operators and the increased competition and innovation that this will bring is good news for both UK consumers and the economy."

The new entrants are:

• 3G - owned by Irish telco Eircom
• Crescent Wireless Ltd - a company whose shareholders have significant interest in Global Crossing
• Epsilon Tele.com - a subsidiary of Japanese bank Nomura
• NTL Mobile - owned by NTL and France Telecom
• One.Tel Global Wireless - a subsidiary of Australian telco One.Tel
• SpectrumCo - formed by Virgin and including Nextel, Sonera, EMI and Tesco
• Telefonica UK - subsidiary of Spanish telco Telefonica
• TIW UMTS - owned by the operator of UK radio network Dolphin
• Worldcom Wireless - owned by MCI Worldcom

Maureen Coulter, senior analyst at Yankee Group Europe, said the competition was "remarkable" and included some very strong competition.

"I'm very impressed with the Virgin bid. They've got their strategy right. It seems they're gaining expertise through Virgin Mobile but they've obviously thought ahead to look at content and financial backing. These will be very important when it comes to rolling out," she said.

Some people have suggested that Virgin is planning to buy One2One, already a major business partner, if its bid is successful.