The Howard Government's reliance on auctioning off spectrum licences to meet surplus is starting to look like an unlucky gamble.

One.Tel and Hutchison, the two highest bidders in last year's 2G licence auction, rejected or expressed uncertainty over their needs for any further spectrum. Both parties said the additional spectrum was not important to their operations.

The May 2000 Treasury Budget factored in an additional AU$2.6 billion from 3G licences to meet surplus.

Packer-Murdoch telco venture One.Tel said in a statement issued to the Australian Stock Exchange that it did -not require additional spectrum" and would not be participating in the auction.

-One.Tel has sufficient bandwidth to run 3G products and services, therefore does not require the additional bandwidth that the upcoming auctions would supply," the statement read.

The statement came even before the Australian Communications Authority, the auction's host, issued applications to likely participamts, an ACA spokesperson said.

One.Tel was the second highest bidder in last year's 2G auctions; Hutchison was the highest.

A Hutchison spokeswoman said it was unlikely the telco would participate in the 3G auctions either.

-We're not sure if it's a cost effective way to get into the things we want to do," she said.

-We've bought 1800 (GHz) spectrum. We're confident we can do quite a lot with that."

-We're not that sure that we're going to be participating."

That leaves Telstra, Vodafone and Cable and Wireless Optus as the main contenders for the auctions, which look set to go ahead in February 2001 as planned.

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