Low broadband bidding no surprise to analysts

NEWS Schema senior analyst Clive Hillier said he felt winning bidders had got a bargain. "I would have expected the London licences to go for as much as four or five times the £5m paid for each. And I would have expected more bidders. "The winners will think they have got a good deal," he says. Interest in the auction was always going to be lower than that for 3G licences, says Hillier, because of the limited appeal of a service with a bandwidth between that of DSL and the needs of big fibre users. He says that the concentration of interest on the major conurbations is explained by the availability of fibre to link masts. "But I am surprised that some less concentrated regions such as Hampshire and Berkshire were not even bid for," he says. The price paid reflects the value of the technology which, Hillier points out, is being squeezed by falling landline prices and the prospect of ADSL services rolling out. "The minimum prices, were above what Americans paid and might explain why the Americans dropped out, said Hillier. "Also, bandwidth has become a commodity product and the real market is now in providing value added services like hosting, VPN [virtual private network} and ISP {internet service provider] facilities." The full results of the auction can be viewed at http://www.radio.gov.uk and http://www.spectrumauctions.gov.uk