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Ireland gets three bids for four 3G licenses

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ComputerWire: IT Industry Intelligence

Ireland last week closed its 3G license bidding process having received just three applications for four licenses, underlining the new caution with which Europe's operators are approaching broadband wireless after the $160bn spending spree of the past two years.

Vodafone Group Plc, mmO2 Plc and Hutchison Whampoa Group each placed bids for both the single available 'A' licenses, but only Vodafone and mmO2 bid for one of three available 'B' licenses. Neither Orange SA, which had earlier expressed interest in bidding, nor Meteor, Ireland's third GSM operator, had tabled bids by the noon deadline last Wednesday.

ODTR, the Irish telecoms regulator, seemed unmoved by its failure to attract a full quota of bidders, and is in any case guaranteed a still significant return from the set license fees that are part of the quasi-beauty contest process.

The 'A' license, which covers the biggest tranche of spectrum, coupled to a commitment to guarantee service to at least 80% at least of the population, also carries with it both the opportunity and the obligation to support mobile virtual network operator (MVNO) services. It is priced at 50.7m euros ($44.2m) for 20 years.

The 'B' licenses offer less spectrum, but also place less onerous terms of service on the operators, limiting their roll-out requirement to just 55% of the Irish population (which is roughly equivalent to Ireland's five major urban areas). The 'B' licenses will cost 114m euros ($99.3m) for 20 years.

Last week, neither Vodafone nor mmO2 was revealing its true preferences.

Vodafone is the most likely of the two to hold out for the 'A' license, since it already controls Eircell, the dominant GSM carrier with 58% of the market. A protracted period of behind-the-scenes bargaining is now likely to ensue, before the ODTR announces its decision in mid-June.

During this time, negotiations between the 3G license holders in-waiting and other operators wishing to play an MVNO role in Ireland are also on the cards.

On Thursday, having bowed out of bidding for spectrum on its own behalf, Orange said it might still be interested in launching 3G services in Ireland, with much depending on who emerges holding the 'A' license.

Western Wireless Inc, the US company that controls Ireland's third GSM operator, Meteor, also said in a statement that its decision not to bid does not mean it has entirely rejected the idea of moving to broadband services. As Ireland's most recent player, with just 3% of the subscriber base ,Western said its immediate aim is to expand its GSM and 2.5G footprint. A future 3G MVNO service is not an impossibility.

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