Australia's 3G spectrum auction has raised just 1.17bn, pleasing telecoms groups but threatening to put a big dent in the budget.
The Australian Communications Authority said the auction closed on its sixth day after bidding ran out at AU$1.17bn in round 19, only slightly over the AU$1.08bn reserve.
The government had forecast it would raise AU$2.6bn from total spectrum sales in the fiscal year to June 30, 2001, with the bulk expected to come from the 3G auction.
The money was a crucial pillar of its budget surplus, which was forecast at AU$4.3bn in its mid-year update.
"It doesn't have any medium-term implications but it does mean the surplus for 2000/01 is fast diminishing, when you also factor in the lower employment and economic growth," said Grant Fitzner, senior economist, HSBC.
The spectrum forecast had long been considered optimistic as it was made last May, when European groups were splashing out big money for licences, but since then there has been a global downturn in telco stocks amid concern at the capital spending.
Six bidders made offers on 48 of the 58 lots available in the auction of 3G spectrum, which is set to provide mobile access to high-speed Internet, data, video and CD-quality music services.
Telstra cashed-up
Telstra spent the most, bidding AU$302.02m and it, along with its rivals, welcomed the low outlay.
"We are very pleased with the price we paid. It is well within the valuations we placed on the spectrum," said a Telstra spokesman.
ACA chairman Tony Shaw said the result represented a fair outcome for both the taxpayer and the successful bidders.
"The spectrum acquired by successful bidders and the overall level of prices paid mean that services should be able to be rolled out quickly," Shaw said in a statement.
The bidders will be allocated licences with a 15-year term, starting October 2002.
Vodafone's Australian unit, which obtained a national licence and paid out AU$253.55m, said it expected to start offering access to many 3G services in 2004.
Hutchison Telecommunications (Australia), which paid AU$196.10m, said it expected to be an early entrant and Cable & Wireless Optus, which spent AU$248.87m, said it would unveil its plans shortly.
Cheap as chips
C&W Optus, which is up for sale, said Australian carriers only paid AU$61 per head of population covered compared with European 3G auctions where carriers paid AU$407 a head.
"The final price was within our forecast and represents great value to our shareholders," C&W Optus managing director mobile, Paul O'Sullivan, said in a statement.
New entrants to the Australian market were Qualcomm 3G Investments, which paid AU$159m for spectrum, and ArrayComm's CKW Wireless, which spent AU$9.45m.
Telstra, Vodafone, C&W Optus and 3G Investments obtained paired spectrum in all capital cities while CKW Wireless took unpaired spectrum in all capital cities and Hutchison paired spectrum in Sydney, Melbourne, Brisbane, Adelaide and Perth.
