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The Dutch UMTS-auction in retrospect.

  • Communication


00 - INHOUD - pag 01-02 cp b R ep or t 20 0 1/ 2 25 The Dutch UMTS auction in retrospect Eric van Damme* Abstract When on July 24, 2000, the Dutch UMTS auction suddenly ended in turmoil – and with revenues of less than 2.65 billion euro, while the Minister of Finance had previously announced revenues on the order of 10 billion euro – the entire country was up in arms. The responsible ministers were called to par- liament to explain what had gone wrong and, apparently not being completely satisfied, the parliament decided to start an official, independent investigation of the entire process by which licenses were awarded, and of the role of the govern- ment, in particular. The goal of the investigation is to provide information on the motivation for using an auction, on the process leading to the specific auction format chosen, and on the auction process – and it has to provide an international perspective. This summer, OCFEB, the Rotterdam-based insti- tution that won the contract to perform the investigation, will publish its results. Now that things have calmed down, many other European countries have also awarded 3G licenses (and stock prices of European telecommunications firms have plummeted to one-third or less of their values from before the auctions), it is a proper time to look back. What can the OCFEB investigation be expected to reveal? What, if anything, has gone wrong? What lessons can be drawn for the future? Revenues in Europe As far as complaints about Dutch revenues are concerned, table 1 provides a sobering picture. The table gives revenues (expressed in euro per member of the population) for all of the Western European countries that have allocated their licenses up to now (the countries are listed according to the time at which they awarded the licenses). The clear message is that the Minister of Finance did not do very poorly: he just misses the rostrum! Furthermore, the only reason why Italy “sco

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