Feeds

BT to lose £1.2 billion for Italian 3G auction pull-out

Lazy giant not too pleased, to go to appeal

  • alert
  • submit to reddit

High performance access to file storage

The Italian government has decided it will keep the £1.2 billion deposit put forward by BT-backed consortium Blu for its 3G mobile phone auction. It claims that irregularities and inconsistencies in the auction process mean that the consortium hasn't fulfilled its obligations and so is not entitled to the return of the deposit.

BT is, unsurprisingly, not too impressed and is going to court both through Blu (today) and on its own (tomorrow) to dispute the decision.

It was Blu's unexpected decision to pull out of the auction after only two days that left just five bidders for five licences. The knock-on effect of this was to reduce expected revenues from £20.8 billion to a paltry £7.1 billion. The Italian government was livid and announced an immediate enquiry.

The enquiry decided that the auction results would still stand and the process was fair and equitable. At the same time, however, it decided that there were questions about Blu's behaviour and so the government should keep its deposit. It is this dichotomy that leads BT to believe it has a strong case.

Exactly what these irregularities and inconsistencies are remains vague - violation of auction procedures in the way it dropped out and violation of confidentiality rules because it made it clear to others that it would pull out - and are likely to remain so until the legal challenges/arguments are run through.

The government was widely criticised for how it handled the auction. There were eight original bidders but two were known to be merely speculative. That left six bidders for five licences - a recipe for disaster. When Blu pulled out, the government saw its dreams for a windfall vanish.

Why did Blu pull out? Well, according to BT is was because of the consortium's setup and rules. Blu comprises eight members: BT, Banco Nazionale De Lavoro, Distacom, Edizione Holdings, Italgas, Mediaset, Palatinus and Sitech. After two days, BT, Banco Nazionale, Mediaset and Distacom wanted to keep in the process but the others wanted out. Those for represented a 52 per cent majority but an 80 per cent vote in favour is needed for positive action, according to Blu rules. BT says it even offered to take a bigger stake in the consortium but couldn't afford the asking price.

And so it looks as though it was a case of too many cooks spoil the broth. And the Italian government, smarting from an embarrassing loss of nearly £14 billion, thought it would try to recoup some of it from the company that caused the situation by pulling out. After all, when £1.2 billion is up for grabs, why not give it a whirl?

Incidentally, the final winners were: Telecom Italia, Omnitel, Wind and the IPSE 2000 and Andala consortiums. And just for completion, they are owned/backed by:

Telecom Italia: Telecom Italia
Omnitel: Vodafone
Wind: Enel, France Telecom
IPSE 2000: Telefonica, Sonera, ACEA
Andala: Hutchison Whampoa, Tiscali, CIR Group, Sanpaole IMI

There you have it. ®

Related Story

BT may be investigated for 3G auction-rigging

High performance access to file storage

More from The Register

next story
Seagate brings out 6TB HDD, did not need NO STEENKIN' SHINGLES
Or helium filling either, according to reports
European Court of Justice rips up Data Retention Directive
Rules 'interfering' measure to be 'invalid'
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
Bored with trading oil and gold? Why not flog some CLOUD servers?
Chicago Mercantile Exchange plans cloud spot exchange
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
IT bods: How long does it take YOU to train up on new tech?
I'll leave my arrays to do the hard work, if you don't mind
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.