Telco giant Telstra said on Sunday it would not be forced to bid at any price for third generation mobile spectrum because of its existing spectrum holdings and technical alternatives.
However, chief executive Ziggy Switkowski added that he believed the growth of mobile communications meant holding blocks of spectrum would be important for Telstra.
Australia plans to auction a still-undetermined number of 3G spectrum licences in January 2001, and the government has estimated it will raise more than AU$2.6 billion.
However, local telcos have consistently argued that the licences will not be expensive, as the country is vast and thinly populated and not as attractive as Europe, where winners paid US$34 billion in Britain and US$46 billion in Germany.
Switkowski said there was a danger contestants could overbid but said Telstra would not be forced to pay exorbitant prices.
"Because we already have a reasonable amount of spectrum and because there are technical alternatives to using this new spectrum we don't have to be a bidder," he said on the Nine Network's Business Sunday programme.
"But longer term because of our conviction about the importance of wireless and mobiles I think having spectrum real estate is going to be important."
Telstra's nearest rival, Cable and Wireless Optus, has already suggested the government put constraints on the bidding to prevent "ridiculous prices" being paid and has warned it could withdraw from the auction if bidding went too high.
Telstra shares closed on Friday up 13 cents at AU$6.44, but still down 28 cents on the week, despite reporting a AU$4 billion annual net profit.
Switkowski said enthusiasm for telco stocks worldwide was waning, partly due to concern over 3G costs, but repeated that cost cutting and revenue growth from new businesses, meant the 50.1 percent state-owned carrier was in a strong position.
