Six bidders -- including Canada's Telesystem International Wireless Inc. -- entered the final stretch of Britain's multibillion-pound auction of new mobile phone licences after Spanish telecom group Telefonica SA pulled out of the race yesterday.
The auction of the five alphabetized third-generation licences, which will allow a range of new interactive media to function through powerful mobile devices, will continue until one of the six remaining bidders has withdrawn.
Analysts say that though the auction's end is near, the bidding rules will allow the process to linger on if all six remain equally determined to win a licence.
"With six players in it, it just means that one person is bidding each round. The whole process is slowed down," said Jo Oliver, telecom analyst at Lehman Brothers.
But he added that any companies placing strategic bids would face the risk of getting stuck without the licence they really wanted, as the auction could end next round or next week.
At the end of round 133 the total of the five bids together stood at £21.22-billion ($33.7-billion U.S.) -- over seven times the amount economists believe the Treasury had estimated before bidding began.
BT PLC submitted a bid for licence E, taking a break from its costly exchange of blows with Vodafone AirTouch PLC in the fight for licence B -- the broadest licence available to existing operators.
Both companies want to ensure they can continue adding subscribers after they use up their existing broadcast spectrum over the next three to four years. But in round 133, BT placed a bid of £3.74-billion for the narrower licence E.
"It's difficult to get inside these guys' heads," Mr. Oliver said. "I think they've been playing a fairly canny bidding game so far, but it does take on a lot of risk if they really are keen to get on a bid for licence B."
Vodafone AirTouch's offer for licence B of £5.66-billion remained the highest after round 133, but the lead had changed three times in yesterday's earlier rounds.
BT closed out last week's bidding in round 129 on Friday with the top bid for licence B of £5.25-billion.
Licence A is identical to B but reserved for a newcomer to the U.K. mobile market, and Canada's Telesystem stayed ahead in that race with its £4.38-billion bid.
Cable operator NTL Inc., backed by France Telecom SA,held its lead bid for the slightly narrower licence C, bidding £3.76-billion.
Among other existing U.K. mobile operators One2One has remained in the game with a £3.68-billion bid for licence D, while Orange PLC -- due to be demerged from Vodafone -- had been in the running for licence E.
Analysts believe Vodafone's deeper pockets will help it take home licence B, and Williams de Broe telecom analyst Nigel Hawkins had said earlier yesterday that BT might start setting its sights on other licences as a result.
That might have implications for the eventual buyer of Orange from Vodafone, he added. If Vodafone took licence B and BT, One2One and Orange shared C, D, and E then licence A could potentially fall into the hands of NTL Mobile.
"If NTL/France Telecom win licence A, they presumably won't go for Orange as well," Mr. Hawkins said. "Therefore KPN would be installed as the favourites to get Orange, but Telefonica might in the final analysis look at Orange even more carefully."
Dutch KPN Telecom NV and France Telecom have been seen as among likely buyers of Orange when Vodafone sells.
The British Treasury plans to pay off debts with the windfall from the auction, which far exceeds the yields from any of Britain's large privatizations over the last two decades. But the government is expected to come under pressure to use the cash in other ways.