Huge difference between the sealed winning bids

Companies bidding for licences in Ofcom's latest spectrum auction will pay between £50,000 and £1.5m for rights to the same frequencies.

Colt Telecom emerged as the highest bidder, while Swedish operator Spring Mobil picked up the same rights for just 3.3 per cent of the price paid by Colt.

However, Colt defended its mammoth bid. "We are quite comfortable with what we've paid," Gill Maclean, head of corporate communications at Colt Telecom, said.

"In a situation like this it's the only thing you can do, because it was a sealed bid. So you have to view it as a commercial proposition and actually work out what it's worth to you.

"As far as we're concerned the value of the opportunity is well in excess of the bid and is firmly based on a business case."

Ofcom agreed that, because the bids were sealed, companies had to place their own value on the licences.

"They all had the same information from the memorandum we sent out in February," said a spokeswoman for Ofcom.

"Obviously they went away and finalised their business plans and their bids reflect how they valued the spectrum."

Maclean explained that Colt Telecom is currently a fixed operator, but is looking to meet a demand for converged services from businesses.

"In order to do that you need the technology and the GSM licence," he said. "Our assessment was that a lower bid would risk losing the licence."

Maclean pointed out that Orange Personal Communications and Zynetix only bid £50,000 and both lost out on a licence.

The 12 awarded licences are for the frequencies 1781.7MHz - 1785MHz, paired with 1876.7MHz - 1880MHz.

Ofcom stressed that the licences are technology neutral, allowing the winning companies to use the spectrum how they wish, within certain technical limits.

Possible uses include private GSM mobile phone networks in office buildings or campuses.

The full list of winners and how much they paid is:

Colt Mobile Telecommunications £1,513,218
TeleWare £1,001,880
BT £275,112
O2 (UK) £209,888
Opal Telecom £155,555
Cyberpress £151,999
FMS Solutions £113,000
Shyam Telecom UK £101,011
PLDT (UK) £88,889
Mapesbury Communications £76,660
Cable & Wireless UK £51,002
Spring Mobil AB £50,110