The government's 3.4GHz wireless spectrum auction looks set for success, according to industry watchers, with the reserve prices for all licences met on the opening day.
The auction began this morning at 10am with 10 bidders, and by the second round prices for all 15 licences had exceeded their reserve price by 10 per cent.
Three of the 15 regional licences, for Greater London, the Midlands and Northern Metropolitan regions, were set at £300,000 each. The reserve price for all other regions was £100,000.
A spokeswoman for the DTI said that the auctions were going well, and could take up to two weeks to complete. Industry watchers said that some licences are expected to more than double the reserve price in some of the lower priced regions.
Rob Mortimer, UK sales director at fixed wireless equipment vendor Alvarion, said: "It's going to be a long process but it looks like being a success.
"The £100,000 licences are expected to reach to between £180,000 and £300,000. The prices for the three £300,000 regions will not reach more than £400,000 to £450,000."
Poundradio, the company set up by Hong Kong-based telecoms company PCCW, is considered the strongest of the 10 companies bidding.
It has bid in all 15 regions, but is not expected to win all the licences. Its nearest rival, Spectrum Nomad, is also bidding in all 15 regional licences, although has yet to place a bid.
Mortimer believes that four or five licences may go to smaller players which are only bidding for one or two regions.
"It is disappointing that the auction has not attracted more big companies, but the good thing is that some of the regional internet service providers may be able to take some of the licences," he said.
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