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Hopes dashed for massive mobile phone windfall

Germany's UMTS auction has got off to a sluggish start Keystone

The government has drastically revised its estimate for expected earnings from the sale of Switzerland's four new mobile phone licences.

This content was published on August 2, 2000 - 09:44

At a news conference in Zurich, the Federal Office for Communication said it now believes the auction of the third generation UMTS licences will net between SFr3 billion ($1.78 billion) and SFr6 billion. Although still a significant sum, the figure is much lower than earlier estimates that the sale could bring in up to SFr10 billion.

The Federal Office For Communication said it was changing its estimate because of lower than anticipated bids for licences made in the Netherlands and Germany.

The President of the Federal Office for Communication, Fulvio Caccia, said in a newspaper interview published on Wednesday that the mobile communications sector had come down to earth since an auction of licences in Britain earlier this year.

The British auction raised far more than the country's government had anticipated and led to concern that telecomunication companies had paid too much. It's feared that could harm customers' interests in the future.

Caccia said he doubted that any of the four licences would be sold for more than SFr1 billion.

Four UMTS licences will be sold off in the autumn. Ten bidders are currently in the running, although it's possible that some may drop out before the auction begins.

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