June 19, 2015 / 10:40 AM / 2 years ago

UPDATE 3-German wireless spectrum auction raises 5 bln euros

* Bidding ends after 181 rounds in 16 days

* Vodafone highest bidder with 2.1 bln euros

* Deutsche Telekom bids 1.8 bln, Telefonica 1.2 bln (Rewrites, adds comment from German telecoms regulator)

By Harro Ten Wolde and Peter Maushagen

MAINZ, Germany, June 19 (Reuters) - Germany has raised about 5 billion euros ($5.75 billion) from Deutsche Telekom , Telefonica Deutschland and Vodafone in an auction of radio frequencies that can be used by mobile phone operators.

The rival companies bid for new blocks of airwaves to satisfy growing consumer demand for streaming video and other data-consuming applications via 4G technology.

Analysts had expected the auction to raise a maximum of 4-5 billion euros after the German wireless market consolidated from four to three players last year.

But the proceeds are a far cry from the roughly 50 billion euros the government raised in an auction in 2000 for new 3G network licences, when there were six groups bidding.

The total raised was 5.08 billion euros; Vodafone bid the highest with a sum of about 2.1 billion euros, followed by Deutsche Telekom with 1.8 billion and Telefonica Deutschland with 1.2 billion, the German telecoms regulator said.

“All parties are satisfied with the results, as are the politicians,” said regulator Jochen Homann just before signing the official documents at a ceremony which was delayed almost two hours as the certificates got stuck in traffic.

Analysts said the prices were low compared with what operators paid in a similar auction in the United States, however.

OLD TV FREQUENCY

Germany started the auction three weeks ago, setting a floor of 1.5 billion euros. The bidding went through 181 rounds, spread over 16 days. The government has earmarked part of the proceeds to help develop a fast fixed-line broadband network.

On Monday, European Union state aid regulators approved a 3-billion-euro support scheme to roll out faster Internet in Germany.

“Five billion is a small fraction of the valuation of this spectrum mix based on the U.S. auction outcome, normalised for German population,” said Antonios Drossos co-founder of Finnish telecoms advisory firm Rewheel.

Earlier this year the U.S. Federal Communications Commission raised a record $44.9 billion or $2.21 per megahertz (MHz) per person in an auction of so-called AWS-3 airwaves, the highest point yet in the wireless industry’s demand for spectrum.

The German auction was the first in Europe to include the low-frequency 700 MHz band formerly used to carry the analogue signals of regional television stations.

These wavebands have longer reach and deeper penetration into buildings than the higher frequencies currently used by mobile network operators. Auction winners will have to promise there will be almost no “black holes” in network coverage.

The 700 MHz auction yielded only around 0.20 euros per MHz per person in the country of 80 million. That is below the 0.26 euros per MHz per person that was paid in Italy’s 2011 auction.

France on Friday set a minimum price of 416 million euros for each of six blocks of 700 MHz spectrum, which will be put on auction before the end of the year.

$1 = 0.8839 euros Editing by Keith Weir and Pravin Char

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