Microsoft plans to pass wireless auction: CEO

SEATTLE Tue Oct 23, 2007 3:59pm EDT

Microsoft CEO Steve Ballmer (L) answers a question from CTIA President and CEO Steve Largent after his keynote address at the Cellular Technology Industry Association (CTIA) conference in San Francisco, October 23, 2007. REUTERS/Lou Dematteis/Handout

Microsoft CEO Steve Ballmer (L) answers a question from CTIA President and CEO Steve Largent after his keynote address at the Cellular Technology Industry Association (CTIA) conference in San Francisco, October 23, 2007.

Credit: Reuters/Lou Dematteis/Handout

SEATTLE (Reuters) - Microsoft Corp (MSFT.O) said on Tuesday it will not participate in an upcoming U.S. mobile phone airwave auction despite speculation that Web rival Google Inc (GOOG.O) will bid at least $4.6 billion on the wireless spectrum.

Microsoft Chief Executive Steve Ballmer said the company was not interested in the auction for the 700-megahertz spectrum band because it would not advance the company's strategy to sell mobile phone software to handset makers.

"What would it buy us to buy a piece of spectrum, one piece of spectrum in one country," said Ballmer at the CTIA wireless conference in San Francisco seen over the Internet. "It would do a lot to alienate the telecom industry."

The airwaves to be sold in the 700-megahertz band are considered prime U.S. wireless property because they can travel long distances and penetrate thick walls. The spectrum will be freed up once broadcast television networks switch to digital from analog in 2009.

Google surprised the telecommunications industry earlier this year by announcing it planned to take part in the auctions for wireless broadband networks, bidding against established wireless carriers if the auction met certain requirements.

It vowed, at that time, to spend at least $4.6 billion on the wireless spectrum if those conditions were met.

One requirement sought by Google and other Internet companies and adopted by the Federal Communications Commission was that part of the spectrum be opened up to allow any mobile device, software or Web service to run on the new networks.

Currently, wireless carriers restrict the models of cell phones that can be used on their networks.

In August, Google CEO Eric Schmidt said the company was leaning toward bidding in the auction, even though not all of its requirements were met.

Google's participation stirred speculation that other Internet players would also take part in the auction, scheduled to begin on January 24 because it would be the last major opportunity for a new player to enter the wireless market.

Ballmer would not address Google directly, but said Microsoft's expertise is not in setting up wireless networks.

"Nobody knows what will happen out of some of our competitors because they are rumored to be doing a lot of things so we will have to wait and see," said Ballmer.

Shares of Microsoft rose 38 cents to $30.89 in afternoon Nasdaq trade.

(Reporting by Daisuke Wakabayashi)

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