Mainz holds first 4G auction

IN 2000, at the height of the tech bubble, telecom operators fell over themselves to snap up 3G or third generation mobile licenses in an auction in Germany.

In the hangover that followed, successful bidders were left drowning in a sea of debt, and 3G, once it eventually got off the ground, proved something of a disappointment.

Ten years on, it is the turn of 4G frequencies to go under the hammer in the western city of Mainz today. The German government expects to reap only a fraction of the €50 billion it received last time. But with the new technology promising nothing less than a revolution, interest among firms like Britain’s Vodafone and T-Mobile is strong, with analysts pencilling in a windfall of €5-10 billion for Berlin.

“Demand is well ahead of supply,” said Matthias Kurth, head of the German telecoms regulator running the auction, with “severe competition” among operators like Vodafone and T-Mobile to grab a piece of the 4G pie.

In Europe’s first 4G auction, a large part of what is up for grabs is the so-called “digital dividend“, a chunk of frequencies left unwanted by television companies following their switch from analogue to digital broadcasting.