HAARLEM (07/24/2000) - The Dutch auction of third-generation mobile phone licences was abruptly ended after Versatel Telecom International NV pulled out of the bidding process.
Versatel Monday said that it was "regrettably" forced to cease bidding after the Dutch government decided not to take action against one of the bidders.
Versatel requested such action after it had received a "threatening letter" from competitor Telfort Holding NV, a wholly-owned subsidiary of British Telecommunications PLC.
In a news release, Versatel said that Telfort on Friday threatened legal action if Versatel continued to bid after "an undefined level of bidding was exceeded."
This morning Versatel requested an intervention by the Ministry of Transport, Public Works and Water Management. According to the company, the letter sent by Telfort represents a serious disruption of the auction process and a violation of the auction procedure.
Nothing happened, however.
The auction Monday went into its 13th day. The auction clock started at 5 billion guilders (US$2.11 billion). Reports say the bidding was halted Monday at 5.9 billion guilders. Libertel NV, a subsidiary of Vodafone AirTouch PLC, and KPN Mobile, subsidiary of Royal KPN NV, win the two largest licenses for 1.57 billion guilders and 1.56 billion guilders, respectively. The three smaller licences go to mobile operators Dutchtone Multimedia BV, Ben Nederland Holding BV and Telfort.
The Dutch government was auctioning five UMTS (Universal Mobile Telecommunications System) licences. The Dutch Finance secretary had estimated the auction would raise 20 billion guilders that would be used to pay off the national debt. The estimate was based on the result of a similar auction in the United Kingdom that raised US$33.22 billion.
Versatel, in Amsterdam, can be reached via the Web at http://www.versatel.com/.