Colin Campbell, chairman of Spectrum Management Authority (SMA), which regulates mobile spectrums on behalf of the government, told Sunday Finance last week that the firms were unable to complete their "packages" due in part to interruption from the Yuletide season.

The SMA, which is overseeing the bidding process, granted the extension to the firms -three foreign, and one local.  "Nobody was able to finish their packages on time," said Campbell.  "So we decided to extend the process to February 3 (2006)."

The auction which is being coordinated by the technology ministry, the SMA and the Office of Utilities Regulations (OUR), was to have taken place between December 5, 2005 and January 5, 2006.  The preferred bidder would have been announced on January 15, 2006, and issued the licence by February 1, 2006.

To be eligible for the licence, investors have to meet specific criteria set out in the Telecommunications Act 2000.  Importantly, to qualify, a bidder must have minimum net asset of US$40 million, and should be operating a wireless network system for a minimum of three years, with at least 100,000 subscribers at the submission date of the bid.

The processing fee to be paid to the SMA is $65,000.  The licence that the government is now about to sell is essentially the one for which AT&T Wireless paid US$6 million a year ago, with plans to focus on roaming to its existing American customers who travel to the Caribbean.

When Cingular acquired AT&T Wireless late last year, the company's outlook changed and the decision was made to sell the Caribbean operation.  In June, Digicel concluded an agreement with Cingular to acquire its Caribbean assets, but the deal excluded the Jamaican licence.  The transfer of the licence to Digicel was not allowed under the agreement between AT&T and the Jamaican government.

With the sale, Cingular Wireless surrendered all its Jamaican spectrum and telecommunications licences "unconditionally".  The fees paid to the government, which after legal fees and spectrum regulatory fees were deducted, totalled just under US$5 million, will not be refunded.

The preferred bidder will be issued a 15-year licence to operate a 2X5MHz block in the 1800 Mhz frequency band and two sets of 2x5MHz blocks in the 1900MHz band, for a total of 2x15MHz.  When the sale was announced in November last year, both Digicel and MiPhone, each of which was provided with two 15 MHZ blocks of spectrum for US$45 million each five years ago, publicly welcomed the competition.

However, SMA chairman Colin Campbell, at the time indicated that the likely price would be considerably lower than that paid by the two initial mobile companies for entry to the Jamaican market.

"Anybody who comes into the market today, is virtually coming into a maturing market," Campbell said two months ago, "in defending the price differential.  "When Digicel came into the market, for instance, the cell user base was under 20 per cent... Now it is in the eighties."

Added Campbell: "When we went to auction in 2002 for the fourth licence, it did not meet our reserve price - US$15 million - so we had to abandon the auction process and go to negotiations."  This eventually led to the sale of the licence to AT&T Wireless in March 2004.

http://www.jamaicaobserver.com/magazines/Business/html/20060107T020000-0500_96199_OBS_FOUR_GET_EXTENSION_FOR_CELL_LICENCE_BID_.asp