Bids for the two largest next-generation mobile licences in the UK government's auction shot over the £1bn mark today.
Late this afternoon, 3GUK had bid £1.15bn for licence A, which is reserved for a new entrant, and BT3G had bid £1.1bn for the B licence.
A Department of Trade and Industry (DTI) spokesman said collective bids have so far reached a total of £4bn.
"It is up to the companies. We have no sight of the amount they are able to bid. If they can't afford it, they shouldn't make a bid or come to the table," he said.
The government, which will reap the escalating profit as the auction continues, is under fire for putting pounds before what will benefit the economy.
Nigel Deighton, research director at analyst Gartner said original expectations were that the auction would net around £2.5bn, but that it is now getting out of control. "It is getting a little bit crazy. The biggest cheque will win. It contradicts what the government has been saying about backing the new economy," he said.
He said third generation licence (3GL) access is about "democratising the web" in a way that can't be done with PCs, modems, set-top boxes and interactive TVs. "Unless the bidders are extremely large or have very deep pockets there will be not much left to pay for innovation."
He said he is disappointed by the way the government has dealt with the allocation. "There should have been a beauty contest. Unlike many other governments they are going for the money."
"These multi-rounds are not the best way to deliver services for the modern economy."
According to Deighton, it is the network subscribers that will end up paying out with increased charges.
"It could also mean slower rollout as the money goes into the licence bids and little is left for innovation," he said.
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