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Italy 4G frequency auction tops €3.7 billion

Successful bidders were Telecom Italia Mobile (TIM), Vodafone and Wind,

Italy's auction of six blocks of 800MHz frequencies for 4G mobile phone services netted €2.962 billion (US$4 billion) Thursday, taking the total of provisional offers for mobile phone frequency licenses to more than €3.7 billion.

The successful bidders were Telecom Italia Mobile (TIM), Vodafone and Wind, the Economic Development Ministry said, with the efforts of the unsuccessful bidder H3G pushing the price well above the government's minimum estimate of €2.4 billion.

The 800MHz frequencies, which will be released by local television broadcasters beginning in December 2012, are the most sought after because they enable operators to cover the largest area with the smallest number of repeater stations. Other licenses for the 1800MHz, 2000MHz and 2600MHz frequencies are still to be auctioned.

The new frequencies are expected to enable operators to extend the geographic coverage and improve the speed of their mobile Internet services. Commentators said H3G's failure to secure the 800MHz licenses may increase the pressure for a sale of 3 Italia to one of its successful competitors.

A political battle has already begun between the Economic Development Ministry and the Treasury Ministry over how much of the auction money should be used to help fund the construction of a national high speed broadband network and how much should be diverted to help the country respond to the Eurozone's ongoing financial crisis.


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