My Paris friend, Gustave Barth, webmaster of Global Auction Alert, was kind enough to supply this news from Europe that has had little coverage in the US press. It shows that after the 3G fiasco Europeans are finally understanding how to make auctions work.

The most important spectrum auction ever held by Germany started on April 12th, after having suffered various delays for a couple of years: about 350 MHz in the 0.8, 1.8, 2.0, 2.6 GHz bands. Some of the spectrum offered is paired, some is not.

The German telecom regulator is running the auction (over the net of course) which, after 11 active days and 82 rounds reached 1.60 billion Euros, i.e. over 2 billion $ (at the current rate of exchange).

There are four contenders only, namely the main mobile operators competing in the German market: T-Mobile, Vodafone, 02 (owned by Telefonica) and E-Plus (owned by the Dutch telecom company KPN).

Whereas a few months ago, the financial expectations about the auction were rather modest, some qualified observers now mention amounts as high as 9 billion Euros (nearly 12 billion $’s) as a possible outcome. This could still require many rounds though. And the regulator has made it clear that the objective was not to maximize the proceeds.

The four contenders are mainly attracted by the 0.8 GHz band for which the bids represent at this stage 86 % of the total bids, though the amount of spectrum in that band is less than one fifth of the total offered.

Press release from German regulator on auction.

UPDATE

M. Barth writes from Paris on May 4:

“I would have liked at this stage to bring you real NEW NEWS. But the auction just goes on, in great silence apparently. At the moment it has reached the 127th round and 2.9 billion euros (3.8 Bill $'s at the current rate); not bad for a nation the size of which is less than one fourth of the US.

During the last ten rounds the major movement continued to be in the 0.8 GHz band (hence a great message re the digital dividend). But there also were a few new bids in the other bands; much less significant though.”