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Monday, 24 July, 2000, 17:19 GMT 18:19 UK
Dutch licences 'go cheap'
Man with mobile phone
Sceptics question whether consumers will pay more for the new phones
The Dutch government has raised far less money than it originally hoped from the sale of third generation mobile phone licences.

The total raised was 5.9bn guilders or $2.5bn, far below the $9bn the government had originally hoped to pocket from the sale.

The 13-day auction was to establish who would run UMTS services in the Netherlands, a mobile telephone technology which allows users to access the internet from a mobile phone.

A disappointed bidder has said it will take legal action against the Dutch government for failing to step into a dispute between it and BT-owned Telfort.

The winners are...

Libertel and KPN have emerged as winners of the two largest licences, paying about $660m each.

BT unit Telfort, Dutchtone and 3G Blue - a Deutsche Telekom consortium - won the three smaller licences.

Only six companies bid for the five licences, fewer than originally expected.

A battle for the two major licences had developed between Telfort, Libertel - majority owned by Vodafone AirTouch - and KPN.

VersaTel pulled out of the auction after the government failed to take action against Telfort, which it alleged had sent it a "threatening letter" over bidding levels.

VersaTel has said it will take legal action against the government.

Junior minister for telecoms Monique de Vries said she was aware VersaTel had launched an action against the government.

"There were no ground to exclude Telfort," she said.

Money earner

Since the UK government raised over 20bn in its mobile phone auction, many European governments have seen the sale of the licences as big moneyspinners.

But many telecom companies are anxious about paying over the odds for licences, from which they will not see returns for many years.

Some observers fear that the expensive licences will result in high costs for the consumer and not all consumers will be prepared to pay for the new technology.

The licence holders must now develop their networks so that by 2007, 60% of the Dutch population has access to them.

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07 Jul 00 | Business
Dutch mobile auction fails to excite
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