MILAN (WiMAX Day). The Italian Ministry of Communications (Agcom) announced yesterday that licenses for 3.4 ~ 3.6 GHz WiMAX spectrum will be auctioned in January 2008. The long anticipated auction will draw interest from international and local bidders. The Italian companies Tiscali, Fastweb, Telecom Italia, Vodafone and Wind, amongst others, are expected to be the lead bidders.

Agcom said the auction will provide for a total of 65 licenses that will be made available in three categories, each with a total frequency of 2×21 Mhz.

One license will be available for each of the first two categories, Block A and Block B, in seven specific geographic regions referred to as “marco-regions.” The regions are: Lombardia, Bolzano and Trento; Valle d’Aosta, Piemonte, Liguria and Toscana; Friuli Venezia Giulia, Veneto, Emilia Romagna and Marche; Umbria, Lazio, Abruzzo and Molise; Campania, Puglia, Basilicata and Calabria; Sicilia; and Sardegna. Any auction bidder can make a bid for each region to make a national network.

A third set of licenses, Block C, will be offered on a regional basis (ie sub macro-region), and according to Agcom, will be available only to those companies that “do not have direct rights of use of spectral resources for the provision of mobile communications services for third-generation (UMTS).”

Block C will in fact be broken down into 21 different licenses available for tender. The objective of the Ministry for creating this class of licenses is to allow smaller regional telecom players with the ability to have immediate access to the spectrum in their local market on the same terms as the much larger incumbent telcos. The Communication Minister Paulo Gentiloni said that a regional license bidder is likely to be a “small company, active on the regional level and tied to the territory.”

The Minister added that the auction “is a fundamental step to ensure access to the network as a right to universal service. This government also confirms its commitment to reduce the Digital Divide that still exists in many regions of Italy.”

The auction is expected to draw over €100 million for the government, which the Ministry stated is a figure commensurate with similar auctions for WiMAX spectrum in Germany and France made in the last year.  Agcom also noted the base prices expected for each license. The macro-region Friuli Venezia Giulia, Veneto, Emilia Romagna and Marche has been given a minimum price of €3,487,000 Euros for one Block B license, while a minimum price for a Block C license in the Valle d’Aosta is set at €40,000 Euros.

The next step to the auction should now follow a tight and rapid schedule. Agcom said that within the next week the auction rules will be published in the Official Journal of the European Community (OJEC). Information will then be available to potential bidders, who will have 45 days to submit an application. Within the following fifteen days, the Ministry will consider the merits of all applications and release a list of approved bidders. The auction will begin thirty days later on January 20, 2008.

Minister Gentiloni stressed that bidders will not be evaluated based solely upon their financial proposals. Equally important criteria will be the ability of a bidder to guarantee sufficient coverage and the speed with which a network can be deployed. Moreover, he emphasised that bids addressing how best to overcome the Digital Divide will receive special consideration.