3G licences going cheap in New Zealand

While European governments are raising big bucks by auctioning 3G mobile phone licences, their New Zealand counterpart is having a tough time getting more than the reserve prices it set.

In marked contrast to the frenetic bidding for third generation (3G) mobile phone licences seen in Europe, the New Zealand government has so far attracted offers little in excess of the NZ$10 million ($4.5 million) reserve prices for the three blocks of suitable radio spectrum it is selling. Telecom Corporation of New Zealand, Vodafone New Zeland and Telstra Saturn have each tabled bids of around NZ$10.5 million.

In May, the New Zealand government said it expected to raise NZ$50 million to NZ$200 million from the auction, while local analysts were at the time talking about the auction bringing in as much as NZ$1 billion. Although such estimates may, in part, have derived from Steinlager theory, the results of the UK 3G auction no doubt played a part.

The UK government in April raked in $34 billion - or about five times more than it had hoped for - and this heightened expectations across the globe. Prices became a bit more realistic when The Netherlands auctioned capacity last month, raising $2.5 billion - a quarter of what the Dutch government had hoped for. In Germany, the bidding has now reached $17 billion, leaving still some way to go before the government target of $38 billion to $58 billion is achieved. The Australian government, meanwhile, has been talking about raising $1.5 billion when it auctions off 3G licences early next year.

Around a third of New Zealand's 3.8 million people have mobile phones. However, it is believed that none of the 70 million sheep in the country have mobiles - although some are on the internet.