British Telecommunications PLC
27 April 2000
BT WINS A 3G LICENCE
BT today won a 3G licence in the UK auction providing further
evidence of the company's determination to retain market
leadership in mobile Internet services.
This licence, coupled with BT's existing GSM spectrum,
will enable the company to deliver first class mobile
multimedia services to its customers at a highly competitive
price. BT is already the leader in the emerging mobile
Internet market with the Genie portal, and will be first to
market with high speed mobile data (GPRS).
This licence represents good value for BT's shareholders.
BT expects explosive growth in mobile data services to deliver
a sound return on its investment over the 20-year lifetime of
the licence.
By winning Licence C at a substantial discount to the
price paid for Licence B, BT has minimised the overall cost of
bringing 3G mobile to its customers without compromising the
range or quality of its services.
The only benefit of Licences A and B over Licences C, D,
or E is that there may be some cost savings in building a
network. These savings are way below the premium Licence B
attracted. Moreover it is unlikely there is any cost
difference at all until several years after the launch of 3G,
by which time more spectrum may well be available.
BT's main auction objective was to secure the best value
licence available at a price that represented a good
investment for its shareholders. In addition, its strategy
was to maximise its forward competitive position. BT believes
that ensuring a large differential between Licence B and
Licence C achieves this.
Sir Peter Bonfield, BT's chief executive, said: 'This was
a high stakes game. We executed a well thought out and gutsy
strategy which ended with us achieving the best value possible
for BT's customers and shareholders.'
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