Eight companies seek Italy's 3G licences

The surprise entry of an unknown consortium, Anthill, raised the number of contestants vying for Italy's third-generation mobile phone licences to eight when the deadline for applications passed at noon last Thursday.

          The surprise entry of an unknown consortium, Anthill, raised the number of contestants vying for Italy's third-generation mobile phone licences to eight when the deadline for applications passed at noon last Thursday, the Italian Communications Ministry says.

          The Italian government will award five licences.

          The Anthill consortium is led by International Last Mile, a telecom company based in the southern town of Matera, Italian media reports. It is backed by a group of companies that operate in southern Italy, specifically in the provinces of Basilicata and Calabria, a Communications Ministry spokeswoman says.

          Anthill's chairman, Attilio Caruso, declines to give details of the consortium's makeupbut says it is in advanced negotiations with several foreign companies. Some of the group's backers are active in the information technology, telecommunications and insurance sectors, news agency reports say.

          The newcomer will have to compete with four strongly-established mobile phone operators and three other challengers. The established operators are Telecom Italia Mobile (TIM), which today announced it had more than 20 million subscribers in Italy; Omnitel Pronto Italia, controlled by Vodafone AirTouch; Wind, an alliance between France Telecom and the Italian electricity utility ENEL; and Blu, backed by British Telecom.

          The Communications Ministry will rule on the suitability of the applications by September 2. Those accepted will be invited to submit business plans by September 11.

          The competitive bidding phase is expected to begin early in October, the ministry says in a statement. The government has set the minimum bid at 4 trillion lire ($US1.86 billion), with bidders required to raise their bids by a minimum of 5% for the first 10 rounds and subsequently by at least 2%.

          The Italian auction is unlikely to reach the levels seen in Germany and the UK because of the dominant position of TIM and Omnitel in the existing GSM market, which between them control 90% of the market, analysts say. In Germany the sale of the six licences raised $US45.6 billion for state coffers, while in Britain five licences generated a revenue of $US33 billion.

          Italy's five licences will be awarded at the beginning of December 2000, the Communications Ministry statement says.

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