Eircom passed the £2 billion sterling (€1.66 billion) mark yesterday in its bid for one of five licences for third-generation mobile phones (UMTS) in Britain.
But in the next round, there was a higher bid from SpectrumCo - a company led by Finland's Sonera - which went into lead position at £2.1 billion. This topped Eircom's previous £2.001 billion offer.
Eircom and SpectrumCo have now emerged as the lead bidders for licence A after round 91 of the British government-run auction. Licence A is potentially the most lucrative because it will provide the largest capacity at 35 megahertz. The bidding for Licence A is not open to British Telecom, Orange, One2One and Vodafone, which already have a presence in the British mobile telecoms market.
Meanwhile, the competitive bidding continued in round 91 for two other licences.
Vodafone topped the bidding for Licence B at £2.228 billion and NTL Mobile bid £1.952 billion for Licence E.
Licences C and D remained static in round 91 after Worldcom had offered £1.879 billion for Licence C and Telefonica bid £1.893 billion for Licence D in round 90.
The total value of the five leading bids now stands at £10.054 billion, more than 20 times the British government's reserve price of £500 million.
Meanwhile, a top UK telecoms analyst has criticised the bidding process saying the auction would weaken mobile phone companies by robbing them of money to invest at home and abroad.
"We have significant concerns regarding the eventual impact of the auction on the development of the UK mobile communications industry," Mr Mark Lambert of Merrill Lynch said. It has been estimated that if Eircom wins Licence A it will have to spend an additional £2 billion to provide the necessary infrastructure to support its network, which would have to extend over 80 per cent of the UK.
The auction will continue until only five companies remain, but so far none of the 13 bidders has pulled out.
The bidding has exceeded even the wildest forecasts and promises the British government a huge windfall.
